News & Events

DOL Issues New Proposed Overtime Rule

By Anne Baggott

The Department of Labor recently issued a notice of proposed rulemaking that increased the salary level necessary for employees to be properly classified as exempt from overtime.  The proposed rule increases the threshold from $23,660 annually to $35,308 annually. 

This level is significantly lower than the $47,476 annual-salary threshold under the 2016 proposed rule issued during the Obama administration. That rule did not go into effect due to a federal court injunction in December 2016.

Since 1940, the DOL’s regulations have generally required each of two tests to be met for one of the Fair Labor Standards Act’s exemptions to apply: (1) the employee must be paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed (“salary basis test”); and (2) the employee’s job duties must primarily involve executive, administrative, or professional duties as defined by the regulations (“duties test”). The new proposed rule makes changes to the salary test. The duties test remains the same under the proposed rules.

If the rule goes into effect after a 60-day comment period that ends in May 2019, employers who have classified their employees as exempt from overtime via the executive, administrative, or professional duties tests must ensure they are paid a minimum of $35,308 annually ($679 on a weekly basis).

Any questions regarding changes to the FLSA overtime regulations can be directed to Anne Baggott at abaggott@dysarttaylor.com or 816-931-2700.