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Labor Department Proposes to  Raise 
Overtime Threshold

There are big changes on the horizon for  existing federal overtime rules. On June 30, the  Department of Labor proposed to raise the  salary threshold that determines when overtime  is paid to qualified employees. This proposed  change could impact approximately 5 million Americans.

As it stands today, the Fair Labor Standards Act (FLSA) ensures that qualified salaried workers are guaranteed payment for one and one half of  the employee's pay after 40 hours of work have been completed. This will remain intact, however, the DOL will be examining the "Duties Test" that determines whether an employee is exempt from this rule. 

 

Currently, exempt employees are defined as (all three):

  • Having a fixed salary
  • Being paid above a salary threshold at $23,660 per year
  • Those who perform executive, administrative, or professional duties

While changes to the "Duties Test" or exemption criteria are unlikely (based on speculation), the DOL has proposed to increase the salary threshold to $970 per week, or $50,440 per year. Anyone making less than $50,440 and working over 40 hours per week will qualify for overtime.


What to Expect

The proposed rule was reviewed and approved by the federal Budget Office and is published in the Federal Register. Comments on the rule and salary threshold can be made through September 4, 2015. Once approved, the rule will likely take effect in early 2016.


In the meantime, Paytime will keep you up to date on any advances in the rule and how it may impact your business.


For a very illustrative example of the DOL proposal, visit US Secretary of Labor Tom Perez's Facebook page. 

Source: http://www.dol.gov/whd/overtime/NPRM2015/factsheet.htm  

 

We appreciate your business and will continue to keep you abreast of any changes surrounding this issue.

   

The Paytime Team