The U.S. Department of Labor (DOL) has proposed a new rule to raise the threshold for overtime exemption. The current rule mandates that employees must be paid at least time and a half for hours exceeding 40 in a workweek.
Presently set at $35,568 annually, the proposed rule suggests that employees earning less than $1,059 per week or $55,068 annually would qualify for overtime pay. This adjustment is anticipated to extend overtime eligibility to approximately 3.6 million workers, marking a substantial 55% increase from the 2019 threshold of $35,568.
Under the proposal, workers can be exempt from overtime pay if they receive a salary of at least $55,068 and fulfill specific job duties for executive, administrative, and professional roles. Those earning less than $55,068 would be entitled to overtime pay for hours exceeding 40 per week.
For employers with previously exempt workers, compliance would involve raising salaries to meet the new threshold of $55,068 annually or reclassifying employees as non-exempt hourly workers, necessitating the payment of overtime for hours worked beyond 40 per week.
The DOL intends to automatically raise the earnings thresholds every three years as part of this proposal.
The association will keep members up to date when these changes go into effect.