Newly Proposed FLSA Salary Level: $35,308
By Kathryn O'Connor, PHR, SHRM-CP, CCP, GRP, Director, Compensation Services
Published March 12 2019
Last week, the U.S. Department of Labor (DOL) unveiled its new proposed overtime rule, aiming to update the salary threshold under the Fair Labor Standards Act (FLSA). Under current regulations, employees with a salary less than $455 per week ($23,660 annually) must be paid overtime when working more than 40 hours per week. According to the proposal, the new salary threshold would increase to $679 per week ($35,308 annually).
If the proposal becomes final, this would be the first increase to the salary level since 2004. Previously, the Obama administration tried to set the salary threshold at $913 per week ($47,476 annually), but the rule was halted days before going into effect.
The proposal does not include any changes to the duties tests, nor does it include automatic adjustments to the salary threshold. Rather, the DOL said it is committed to executing a periodic review of the salary threshold, which would require a formal rulemaking process to change. The proposed rule does allow employers to use nondiscretionary bonuses and incentive payments (including commissions) that are paid annually or more frequently to satisfy up to 10% of the new salary level.
When drafting the proposed rule, the DOL reviewed current wage data projected to January 1, 2020. Furthermore, it relied on information gathered through six in-person listening sessions and more than 200,000 comments collected during a 2017 Request for Information (RFI).
It’s important to remember that this proposed rule is not final. The public has 60 days to respond by submitting comments. Once the comment period closes, the DOL is required to review and consider all comments before finalizing and publishing the regulations. Since this can take several months, it’s most likely the final rule will be released towards the end of 2019 or early 2020.
More information about the proposed rule is available from the DOL, and our HR Source staff stands ready to answer questions on this topic for members. Contact us at 800-448-4584 or firstname.lastname@example.org.