Blog FPO

Department of Labor proposes new overtime rule

On March 7, the U.S. Department of Labor proposed a rule that would allow more employees – perhaps as many as 1 million – to earn overtime wages.

In our industry, laden with events, what does this mean? Could this affect professional development opportunities?

Let’s take a look at the rules.

Under the current law, employees who earn less than $23,660 annually must be paid overtime should they work more than 40 hours per week. But under the new rule, the salary cut off is $35,308 per year.

The department said it held listening sessions, and commenters all agreed the rule needed to be updated.

Other details:

  • The proposal increases the total annual compensation requirement for “highly compensated employees” from the currently-enforced level of $100,000 to $147,414 per year.
  • It provides a commitment to periodically review, and update if necessary, the salary threshold. An update would continue to require notice-and-comment rulemaking.
  • Employers can use nondiscretionary bonuses and incentive payments (including commissions) that are paid annually or more frequently to satisfy up to 10 percent of the standard salary level.
  • No changes overtime protections for:
    • Police Officers
    • Fire Fighters
    • Paramedics
    • Nurses
    • Laborers including: non-management production-line employees
    • Non-management employees in maintenance, construction and similar occupations such as carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, and construction workers
  • No changes to the job duties test.
  • No automatic adjustments to the salary threshold.

The department says it will consider all timely comments in developing a final rule.

“Our economy has more job openings than job seekers and more Americans are joining the labor force,” said Secretary Alexander Acosta in a press release.  “At my confirmation hearings, I committed to an update of the 2004 overtime threshold, and today’s proposal would bring common sense, consistency and higher wages to working Americans.”

In 2016, the Obama administration proposed changes to the overtime rule, which concerned association professionals and led ASAE to take a stand.

But now, ASAE supports the change.

“ASAE believes the DOL’s current proposal to update the overtime rule reflects a more reasoned approach to ensuring salaried Americans are fairly compensated for their work,” said ASAE President and CEO John Graham. “There is no question that the 2004 salary threshold needed to be updated. The administration’s new rulemaking should also ensure that businesses can plan for payroll increases without jeopardizing their prospects for future growth and success.”

Stay tuned as I continue to cover this topic. What are your thoughts?

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