Key Points of the Department of Labor’s New Proposed Rule Regarding Overtime Compensation:
- Current Threshold: If you employ salaried individuals who do not supervise others and earn more than $35,000 annually, you are not required to pay them overtime for hours worked beyond 40 per week.
- Proposed Change: The Department of Labor is considering raising the salary limit for exemption from overtime to $55,000 per year.
- Impact on Non-Exempt Employees: If the proposed rule is enacted, non-exempt employees (salaried, not supervising others) making less than $55,000 annually would be eligible for overtime pay at 1.5 times their hourly rate for hours worked beyond 40 per week.
- Importance of Compliance: It is crucial to consult with a labor attorney or HR expert to ensure compliance with the proposed overtime ruling. Proper classification of employees based on their duties and responsibilities is essential.
- Legal and Administrative Considerations: The rule may face delays due to the absence of a Senate-confirmed Secretary of Labor and potential legal challenges, as occurred in previous attempts to raise the salary threshold.
- Proactive Measures: Businesses should prepare for potential changes by reviewing employee classifications, discussing overtime policies, and seeking professional advice to avoid legal consequences and ensure compliance.
- Potential Business Impact: The proposed rule could impact businesses, prompting considerations like workforce adjustments or implementing stricter rules for salaried employees regarding overtime work.
- Urgency in Preparation: Regardless of potential delays in rule implementation, businesses are advised to take proactive measures and be prepared for adjustments to comply with overtime regulations.
Note: The transcript also mentions the role of an acting Secretary of Labor, Julie Su, and the historical context of a previous attempt to raise the salary threshold during the Obama administration, which may influence the rule’s fate.
Overtime Compensation: How the New Rule Will Impact Businesses (thehartford.com)
