The Department of Labor (DOL) anticipates proposing new overtime rules sometime in August. The forecasted announcement is included in the government agencies’ spring regulatory agenda, but the actual date could be subject to change. The DOL originally listed a new overtime ruling on their regulatory agenda in the fall of 2021. An updated salary threshold for overtime eligibility was also previously expected in May of this year but was not actualized.
The DOL is expected to raise the salary threshold for overtime eligibility exemption, expanding the pool of employees entitled to overtime pay for hours worked over 40 in a seven-day period. While an exact number has yet to be determined, some experts are speculating that the increase could be around $10,000. Since 2020, the Fair Labor Standards Act (FLSA) has set the salary threshold for overtime pay at $35,568 or $685 weekly. Salary and job duties are both factors that determine overtime eligibility. Consequently, even if an individual’s job duties qualify for an FLSA-recognized exemption from overtime, a salary that’s below the threshold would automatically qualify a position for overtime.
When a new overtime rule is announced, employers should be aware of the implications a new threshold could have on their business operations and budget. Response strategies could include raising salaries to maintain exemption status for impacted employees, maintaining current salaries and budgeting for potential overtime hours or reevaluating work hours. Failure to comply with new rules could land employers in hot water.
Bukaty Companies will continue to review updates and issue communications regarding overtime ruling, as necessary. In the meantime, if your company is considering taking a closer look into your compensation practices consider utilizing our compensation studies capabilities. Our expert HR consultants can help you establish a clear pay structure, ensure your compensation is within market standards and design and administer total compensation statements.