DOL Proposes New Overtime Rule

It may be time to sharpen your pencils (again)!

The Department of Labor (DOL) has proposed an increase to the salary threshold for overtime eligibility from $23,660 per year to $35,308 per year. In turn, the proposal would expand overtime eligibility to more than one million U.S. workers. While this proposal is considered a win for employees, more than half of those individuals who would have been covered under the Obama regulations in 2016 will not see the protection they were originally afforded.

To recap, the Obama administration doubled the current salary threshold to $47,000 per year. This action made over 4 million employees eligible for overtime. It was short-lived, however, as the change was challenged in court and ultimately struck down over concerns that the new threshold was too high. By the time the rule was overturned, many employers had already gone through significant time and expense to ensure compliance with the new regulations.

Key points of the proposed regulations are as follows:
• No automatic adjustments to the salary threshold although the DOL intends to propose updates every 4 years
• No differences based upon geographic region of the country
• No changes to the duties test

This is a proposition that will be subject to more scrutiny. Staying informed is the most immediate recommendation.

We also recommend that employers take the time to review their exempt positions and ensure they qualify under the duties tests.

Baker Tilly Vantagen professionals can offer guidance and recommendations on proactive steps to ensure compliance. Changes aside one thing is for certain – the DOL continues to remain focused on identifying wage and hour violations. Completing a full audit of your workforce now may help prevent future problems – including significant fines and penalties.