Department of Labor Releases Proposed Rule to Increase Minimum Salary Threshold for Overtime Exemption

On March 7, 2019, the Department of Labor released a long-awaited proposal to increase the minimum salary requirement for exempt employees from $23,660 to $35,308.  The DOL’s proposed rule comes nearly two months after it sent the rule to the Federal Office of Management and Budget for review – a story we previously reported about here.  

Assuming the proposed rule is adopted, to be exempt from overtime, an employee would need to be compensated on a salary basis at a rate of not less than $679 per week and perform the job duties required by the applicable “white-collar” exemption – namely, the executive, administrative, professional, outside sales, or computer professional exemption.   According to commentators, the increase in the minimum salary threshold would make 1.1 million additional workers eligible for overtime.

The proposed rule also contemplates a process to update the minimum salary threshold every four years.  The DOL has specifically requested input from the public on how this process should function.   

The proposed regulations will be formally published in the Federal Register next week.  After their publication, members of the public (e.g. employers, unions, business groups, workers’ rights groups, etc.) will have 60 days to comment on the proposed regulations.  Following the notice and comment period, the DOL may decide to amend its proposal based on the feedback it receives.  Alternatively, the DOL could keep its proposed rule intact.  

Readers will recall that in 2016, twenty-one states, the U.S. Chamber of Commerce, and several business groups filed a lawsuit to enjoin the Obama Administration from raising the minimum salary from $455 per week to $913 per week.  Many commentators believe this time around will be no different and readily expect both business and workers’ rights groups to mount legal challenges.

We will keep you updated on this developing story.   

March 7, 2019, the Department of Labor released a long-awaited proposal to increase the minimum salary requirement for exempt employees from $23,660 to $35,308.  The DOL’s proposed rule comes nearly two months after it sent the rule to the Federal Office of Management and Budget for review – a story we previously reported about here.  

Assuming the proposed rule is adopted, to be exempt from overtime, an employee would need to be compensated on a salary basis at a rate of not less than $679 per week and perform the job duties required by the applicable “white-collar” exemption – namely, the executive, administrative, professional, outside sales, or computer professional exemption.   According to commentators, the increase in the minimum salary threshold would make 1.1 million additional workers eligible for overtime.

The proposed rule also contemplates a process to update the minimum salary threshold every four years.  The DOL has specifically requested input from the public on how this process should function.   

The proposed regulations will be formally published in the Federal Register next week.  After their publication, members of the public (e.g. employers, unions, business groups, workers’ rights groups, etc.) will have 60 days to comment on the proposed regulations.  Following the notice and comment period, the DOL may decide to amend its proposal based on the feedback it receives.  Alternatively, the DOL could keep its proposed rule intact.  

Readers will recall that in 2016, twenty-one states, the U.S. Chamber of Commerce, and several business groups filed a lawsuit to enjoin the Obama Administration from raising the minimum salary from $455 per week to $913 per week.  Many commentators believe this time around will be no different and readily expect both business and workers’ rights groups to mount legal challenges.

We will keep you updated on this developing story.   

 

About Brian Casaceli

Brian is an associate in the firm's Labor, Employment and Employee Benefits Group. He focuses his practice on representing employers in federal and state courts in Massachusetts, as well as before the Massachusetts Commission Against Discrimination, and the Equal Employment Opportunity Commission in defense of claims of discrimination, sexual harassment, wrongful termination, breach of contract, and wage payment violations. Brian also has experience in representing employers in wage and hour investigations by the U.S. Department of Labor and the Massachusetts Attorney General. Brian further counsels employers on day to day employer issues, and has experience drafting employer handbooks and other employer policies.
This entry was posted in DOL, Overtime, Uncategorized and tagged , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s