A proposed Department of Labor (DOL) rule would make overtime pay available to exempt employees whose salary is less than $55,068. Currently, white-collar employees whose duties qualify for an exemption from overtime under the Fair Labor Standards Act (FLSA) need only be paid $35,568.
Overtime compensation is governed by the FLSA and requires workers (based on salary and duties) to receive 1.5 times their regular hourly rate for hours worked in excess of 40 in a workweek. Should the rule be finalized, employers will need to increase wages for exempt employees falling below the annual threshold or convert those positions to nonexempt and begin paying overtime. The FLSA also requires an accounting of actual time worked for nonexempt positions.
The proposed rule also adjusted the salary-level threshold for highly compensated employees (HCEs) to $143,988 from $107,432. HCEs are exempt from overtime as long they regularly perform non-manual work and perform at least one exempt duty, such as supervising two or more employees.
Written comment on the proposed rule will be accepted 60 days following publication in the Federal Register. As with prior efforts to adjust overtime salary thresholds, legal challenges are expected
For additional information, contact your Bukaty benefits consultant at 913.345.0440.
