The Department of Labor is announcing its new overtime regulation this afternoon
From the US Chamber of Commerce:
The Department of Labor is announcing its new overtime regulation this afternoon in Columbus, OH with VP Biden and others. Here are a few quick points and our press release below. We’re happy to add more color over the phone or by email.
The salary threshold will be increased to $47,476 annually ($913/week)—an increase of slightly more than 100% from the current threshold of $23,660 annually ($455/week).
The proposed level was $50,440 annually ($970/week).
There will be no changes to the duties test.
The DOL had indicated it was considering adding a quantification component similar to California’s that would have required employers to show an employee was performing exempt duties a certain percentage of time to qualify under the specific exemption.
The salary threshold will be updated every three years and tied to the 40th percentile of full time salaried workers in the lowest wage region of the country (currently the Southeast).
The proposal had the automatic updates happening annually but was unclear on the methodology for the updates.
Employers will have until December 1, 2016 to come into compliance with the new requirement—a period of about 200 days.
The proposal did not include an implementation period but there were suggestions it could be as short as 60 days.
No indication about how commissions/bonuses/incentive based pay will be treated.
The DOL sought comments on whether to give a 10% credit for these types of compensation.
While we remain disappointed in the excessively high salary threshold, the changes made since the proposed regulation reflect points and arguments the Chamber made in our comments, testimony, and meetings with the Administration. The U.S. Chamber, with help from many of you, pushed hard for:
- a much lower salary threshold;
- no changes to the duties test;
- an implementation period no less than 6 months; and
- no automatic annual updates.
We plan to do a nationwide conference call soon on this issue, and we will continue to keep you updated with any new information. Meantime, please also see:
Attached is a letter signed by many of you in support of legislation to block this rule, which has been introduced in both the House (H.R. 4773) and Senate (S. 2707).
SHRM has a good, updated site with helpful links and maps.
Check out our blog post on the expanded liability/litigation angle to this that is not getting a lot of coverage.
We also have deep dive page on the issue, and another blog re: non-prof/local gov impacts, but they use slightly higher threshold numbers from the proposed rule, not the final released today.