The U.S. Department of Labor issues its Proposed Updated Overtime Rule

On March 7, 2019, the United States Department of Labor ("DOL") issued a Notice of Proposed Rulemaking regarding the "white collar" exemption of the Fair Labor Standards Act ("FLSA"). Specifically, the DOL proposes to change the minimum salary an employee can receive without being eligible for overtime pay for work over forty (40) hours a week. See the FLSA, 29 U.S.C. 213(a).

Since 2004, the threshold salary for an exempt employee to remain ineligible for overtime has been $23,660 annually and $455 per week. An exempt employee who makes at least this salary must still meet the test for the claimed exemption (the employee must primarily perform exempt job duties under the Executive, Administrative, Professional, Outside Sales and Computer Employees exemptions from overtime). If an employee makes less than this $23,660 threshold salary and works over forty hours in a week, the employee is entitled to overtime pay for those hours over forty.

The DOL's proposed rule will increase the threshold salary to $35,308 annually and $679 per week.

As you may recall, the 2016 Final Rule, which would have changed the overtime threshold amount to $913 per week or $47,476 annually, was scheduled to take effect December 2016. However, a federal court in Texas enjoined and halted the Final Rule from taking effect.

According to the DOL, if its current proposal is instituted, a million more American workers would become eligible for overtime. News Release. The DOL encourages the public to submit comments within 60 days of the rule being published in the Federal Register.