Update: DOL Provides More Details on Proposed Overtime Changes

Last week President Obama announced via Huffington Post proposed changes to the overtime regulations. We discussed this proposal in our previous blog post here. The announcement focused on the changes to the salary threshold employees would need to be paid to be non-exempt (not paid overtime). Last week, the Department of Labor (the agency in charge of making these changes) held a conference call and began the process of accepting comments to the proposed rule modifications. As result the DOL has provided more details on the proposed changes.

Here are the key proposed changes (taken from DOL’s Fact Sheet)

  1. set the standard salary level at the 40th percentile of weekly earnings for full-time salaried workers ($921 per week, or $47,892 annually);
  2. increase the total annual compensation requirement needed to exempt highly compensated employees (HCEs) to the annualized value of the 90th percentile of weekly earnings of full-time salaried workers ($122,148 annually); and
  3. establish a mechanism for automatically updating the salary and compensation levels going forward to ensure that they will continue to provide a useful and effective test for exemption.

As you can see there were additional proposed changes. The DOL is proposing to update the salary requirements for one of the more unique exemptions – the highly compensated employee – from $100,000 to $122,148. In addition, the DOL is proposing a method to automatically update the threshold salary for the white collar exemptions and the highly compensated exemption.

Finally, the DOL confirmed that it is also seeking comments regarding the duties that an employee must perform to qualify as exempt, but has not made any specific proposals.  Any changes to the duties tests could provide additional regulatory changes resulting in more employees being eligible for overtime. We will continue to update our blog as these changes are made.

With the complexity of overtime and wage laws, it is important to only consult with an attorney that has experience with wage and overtime theft. Contact Maduff & Maduff today for help with your employment law needs.