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New FLSA Overtime Rule Threshold Expected to Rise to $35K

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The U.S. Department of Labor (DOL) is poised to increase the overtime threshold to $35,000, according to a Bloomberg Law report.

The DOL sent its proposed overtime rule to the White House’s Office of Management and Budget (OMB), Office of Information and Regulatory Affairs (OIRA) for review a little more than a month ago. The DOL is expected to officially release the new rule soon, according to the Bloomberg Law report.

“The $35,000 threshold is in line with what we’ve been hearing from DOL officials since the Trump Administration took office,” said Melissa Sharp Murdock, WorldatWork director of external affairs. “Bloomberg’s reporting indicates that the Department may have decided not to include an automatic update to the salary level test. If true, this could make the rule less susceptible to legal challenges.”

The DOL is updating the Fair Labor Standards Act (FLSA) regulations that set the salary threshold for which employees must be paid time and 1/2 when working more than 40 hours in a week. The current salary threshold test is set at $455 per week or $23,660 annually. Employees earning less than this must be classified as non-exempt workers and are entitled to overtime pay for hours worked over 40 per week.

The Obama administration unsuccessfully attempted to raise the salary level test to $47,476 back in 2016. The Obama-initiated rules also included an automatic update that would have tied the salary-level test to the 40th percentile of salaried workers. These rules were tied up in litigation and never went into effect.

Even though the new overtime rule is poised to become public in the near future, it could still be a while before it ever goes into effect, Murdock said.

“The Labor Department will need to publish the proposed rule, receive public comments and adequately review those comments before finalizing the rule,” she said, “so the earliest these changes could go into effect would likely be the end of 2019.”

About the Author

Brett Christie is a staff writer at WorldatWork.

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