On March 7, 2019, the Department of Labor announced a new proposed rule that would extend eligibility for overtime pay to approximately 1.1 million additional workers. The proposed rule would require overtime pay for all employees earning less than $35,308 per year. Employees who earn more than this threshold amount can still qualify for overtime exemptions if their job duties primarily involve executive, administrative, or professional functions, often called the “white-collar” exemptions. Unless exempt, employees covered by the Fair Labor Standards Act must receive at least one and one-half times their regular hourly pay rate for all hours worked over 40 in a workweek.
Compliance with the new proposed rule is not required yet, as the DOL anticipates the rule taking effect in January 2020. In the meantime, employers should carefully examine the salaries for any employees who are currently deemed exempt from overtime requirements to be prepared for the proposed rule change. The proposed rule presents a good opportunity for employers to audit whether their currently exempt employees actually satisfy the duties test for the white-collar exemptions. A number of strategies are available to businesses that plan ahead to ensure that reclassification of employees does not result in additional payroll expenses.
If you have any questions on this matter, please contact Brett J. Schneider, Esq. at bschneider@wsh-law.com or Michael S. Kantor, Esq. at mkantor@wsh-law.com. For more information about our labor and employment practice, please see http://www.wsh-law.com/practices/labor-and-employment-law3/.
