The Overtime Exemption Increase May Be Back

Article Posted on 03/21/2019

In May 2016, the Obama administration finalized a new rule to make an additional 4.2 million salaried workers eligible for overtime pay. The Obama-era rule would have increased the federal overtime salary threshold 100% -- a devastating amount for small and mid-sized businesses, taking the salary threshold at which white-collar (salaried) workers are exempt from overtime pay from $23,660 to $47,476. The threshold would have been automatically updated every three years. The Obama regulations were halted by a federal lawsuit.

Now it is back but not quite as harsh. The new Trump administration proposal is about halfway between the current threshold, which has been in effect since 2004, and the Obama-era rules. "The Labor Department proposal is posted on the federal website where the public can post comments. It can be found in a search for the regulations' docket number, RIN 1235-AA20."

The U.S. Labor Department's newly proposed regulations on overtime "would raise the pay threshold at which workers would be exempt from overtime to $35,308 from the current $23,660. The proposed rules would make more than 1 million workers eligible for overtime" -- most likely affecting "workers with jobs like shift supervisor or assistant manager at restaurants, retailers and manufacturing companies. 

We will keep you posted as this develops.

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