On December 10, 2021, the Department of Labor (DOL) announced its agenda to review and update regulations for the overtime threshold established by the Fair Labor Standards Act (FLSA). A formal proposal of their new rules is expected within the month.
The overtime threshold establishes a salary level by which non-exempt employees must receive overtime pay for hours worked in excess of 40 within a single workweek. Overtime pay must be at least one and a half times the regular rate of pay. A workweek is defined as seven sequential 24-hour periods and can start on any calendar day. In addition to salary requirements, the DOL looks at an individual’s duties to determine if a position is exempt from overtime pay. Generally, there are three white-collar exemptions – executive, administrative and professional. The duties of these three classifications are not expected to change at this time. However, those impacted by the expected increased salary threshold will be newly eligible for overtime pay.
The current overtime threshold went into effect on January 1, 2020, and is capped at $35,569 annually or $684 weekly. The DOL’s proposed rate will certainly be an increase from the current rate, but the exact details remain unknown. The Biden administration noted their support of the Obama-era 2016 proposal that would have raised the weekly threshold to $913 per week or nearly $47,500 with automatic increases every three years.
Bukaty Companies will continue to monitor the situation and release updates as needed.
