Department of Labor Proposes Changes to Overtime Pay Salary Cap

By Megan Walter, Policy & Federal Relations Staff

The U.S. Department of Labor announced last week its Notice of Proposed Rulemaking to raise the salary cap for employees eligible for overtime pay. Currently, only employees with a salary below $455 per week ($23,600 annually) are able to receive overtime pay if they work more than 40 hours per week. If the Trump administration's proposal is finalized, that cap would be raised to $679 per week, or $35,308 annually. The administration estimates that this increased salary cap would make more than 1 million working Americans newly eligible for overtime pay.

This proposal differs from the Obama administration’s 2014 proposal, which sought to raise the salary cap to include workers earning salaries of up to $47,000 annually, and would have tied cap increases to the cost of living. The proposal ended up ultimately being blocked by a federal judge, and never went into effect.

In 2017, the Department of Labor requested public feedback while developing this proposal, for which they received over 200,000 comments, in which nearly all expressed agreement that the salary cap needed to be raised. In the Notice of Proposed Rulemaking, the Department of Labor included a commitment to periodically review the salary threshold, and will require a notice and comment period before any adjustments could be made to the salary threshold. Unlike the Obama administration's proposed rule, this rule does not require automatic salary cap raises tied to cost of living increases.

The proposed rule does not include any specific rules related to employees in higher education, but current overtime rules exempt faculty members from receiving overtime pay, as well as some administrative employees depending on the job duties and job title.

The Department of Labor encourages any interested members of the public to submit comments about the proposed rule electronically at www.regulations.gov, in the rulemaking docket RIN 1235-AA20. Comments must be submitted within 60 days from the Federal Register publication, which is expected to be posted shortly, in order to be considered.

 

Publication Date: 3/18/2019


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