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United States Department of Labor
Issues
New Overtime Regulations
Some of you may remember that in May of 2016, under the Obama
administration, the U.S. Department of Labor (DOL) issued proposed
revisions to the overtime regulations. The biggest change for
employers was that the minimum salary threshold to meet the salary
level test of the Fair Labor Standards Act (FLSA) would increase
from the present $23,660.00/year to $47,476.00/year. The new
minimum threshold was scheduled to go into effect on December
1, 2016. However, just days before it was scheduled to go into
effect, a federal judge in Texas blocked the new rule.
On March 8, 2019, the DOL announced a Notice of Proposed Rule-making
which would make more than 1.3 million more American workers
eligible to be paid overtime whenever they work more than 40
hours within a one week period of time. The new proposal would
boost the minimum salary level from the present $23,660.00/year
to $35,308/year ($679.00 per week).
On September 24, 2019, the final new overtime rule was issued.
It will be effective for all employers as of January 1, 2020.
The final rule modifies the proposed rule somewhat. The final
rule raises the salary threshold to $35,568/year ($684.00/week).
This means that as of January 1, 2020, any employee who is making
less than $684.00 per week must be paid overtime for any week
in which that individual works more than 40 hours.
Employers should immediately begin the process of determining
who in the organization is presently classified as Exempt from
being paid overtime and whether or not those individuals will
need to have a salary increase in order to meet the new minimum
salary threshold.
A company’s best defense against
the potential expense and aggravation related to federal or state
law violations is to proactively review and revise as needed
all Human Resources policies, handbooks, hiring procedures, compensation,
benefits, training programs, communications tools and other functions.
The professionals of PHHR are ready to assist your organization
with this type of training as well as to maintain compliance
with the latest state and federal mandates.
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