With the publication of a proposed overtime rule expected as soon as next month, employment law attorneys are anticipating the DOL will recommend higher salary level thresholds for the white . Employers can include up to 10% of nondiscretionary bonuses, commissions, and incentive payments in the minimum salary level. DOL Pencils in May 2023 for New Overtime and Independent Contractor Rules The district court further sent the DACA policy to the DHS for further consideration. DOL Plans to Propose Overtime Rules in October - HR Works NLR does not answer legal questions nor will we refer you to an attorney or other professional if you request such information from us. Why is the Department revising its overtime regulations? Many employers fear the DOL will adopt California's rules, according to Boonin. Well be sure to keep CUPA-HR members updated on all the latest details regarding the proposed overtime rule and possible advocacy opportunities during the OIRA review process. [5] Now is a good time to review your employee compensation data to determine which exempt employees earn between $684 and $1,000 a week and may be impacted. Regulatory agenda lists the status of anticipated regulatory actions. "The best bet is the Biden administration will seek to increase the salary amount further, probably closer to the Obama amount and possibly seek to reimplement the automatic increase," Barsanti said. The salary threshold is now $35,568 per year, Robinson said. However, a federal judge struck it down. The district court did this partly based on its conclusion that the June 2012 memorandum announced a legislative rule that required notice-and-comment rulemaking. Survey Participation and Information Templates. The methodology used to set the standard salary level in 2004 has withstood the test of time, is familiar to employees and employers, and can be used without causing significant hardship or disruption to employers or the economy. (Note: direct costs for employers under this proposed rule are expected to be $224 million less per year than under the 2016 rule.). Minimum salary threshold for exempt executive, administrative, and professional employees (also called "white-collar" employees) = $684 per week ($35,568 per year), The minimum salary threshold could be increased to $47,476 per year, or even as high as $62,000 to over $80,000 per year, Minimum annual pay level for highly compensated employees = $107,432 per year, Whether the minimum pay level for highly compensated employees will change is unknown. Perhaps the rule has been delayed due to concerns about inflation and how the change would impact small and midsize businesses, or perhaps the administrative process is just taking longer than the agency originally anticipated. A Davis-Bacon Act final rule is now scheduled for December. The Trump administration implemented new salary levels in 2019, but the Biden administration may be looking to make bigger changes. Your session has expired. $(document).ready(function () { Please purchase a SHRM membership before saving bookmarks. Whether the job duties test will change is not known. With the new proposal still unreleased, it would be premature for employers to start making changes to their pay policies. Later, during the Trump administration, the DOL issued a different final rule raising the weekly salary minimum from $455 to $684, effective January 1, 2020. A. Workers making at least this salary level may be eligible for overtime based on their job duties. Federal government websites often end in .gov or .mil. Lee Schreter, an attorney with Littler in Atlanta, said she wouldn't be surprised if the DOL tightens up the administrative exemption. The U.S. Department of Labor (DOL) had predicted it would issue its proposed new rule to overhaul the overtime regulations of the Fair Labor Standards Act in October, but we are still waiting for that proposal. Note: The 2016 final rule that was struck down updated the special salary level for American Samoa and motion picture industry employees. The proposal increases the total annual compensation requirement for highly compensated employees (HCE) from the currently-enforced level of $100,000 to $147,414 per year. Washington, DC 202101-866-4-US-WAGE1-866-487-9243, Administrator Interpretations, Opinion and Ruling Letters, Resources for State and Local Governments, Notice of Proposed Rulemaking (NPRM): Overtime, Notice of Proposed Rulemaking: Overtime Update. Many business groups, however, oppose another increase to the salary threshold. What should I be thinking about if I'm looking to expand my workforce globally? The current rate which took effect on January 1, 2020 represented the first change to the threshold in a decade. } Any legal analysis, legislative updates or other content and links should not be construed as legal or professional advice or a substitute for such advice. But first, lets take a step back and review the current requirements under the federal Fair Labor Standards Act (FLSA). $("span.current-site").html("SHRM MENA "); Improve our virtual onboarding experience, Automate repetitive and time-consuming tasks. Please log in as a SHRM member. This spring, employers are expecting to learn about the U.S. Department of Labor's (DOL's) proposed changes to the overtime rule. Lawmakers recently introduced a bill that would immediately raise the exempt salary threshold for so-called "white-collar" workers to $45,000 a year. The New York State Department of Labor Announces Strengthened Labor Law There are some in the department who believe that in order to be eligible for the exemption, an employee shouldn't be involved in any type of selling, she said. document.head.append(temp_style); You may be trying to access this site from a secured browser on the server. U.S. Department of Labor Issues Final Overtime Rule Under currently enforced law, employees with a salary below $455 per week ($23,660 annually) must be paid overtime if they work more than 40 hours per week. If at First You DuPont Succeed, Try a Different Factor. "Some commentators, though, believe that the administration may go the distance this time and look toward conforming the federal rules to more closely reflect the California standards," he said. This isnt anything new. document.head.append(temp_style); You may be trying to access this site from a secured browser on the server. Once anticipated in the spring, the proposed rule will recommend how to implement the exemption of bona fide executive, administrative and professional employees from the Fair Labor Standards Act's (FLSA's) minimum wage and overtime requirements. }); if($('.container-footer').length > 1){ $("span.current-site").html("SHRM MENA "); Small businesses power the economy. This did not come as a surprise to many who were following this issue. Congress Mulls Bill to Raise Exempt Salary Threshold as DOL Finalizes According to XpertHR, The DOL may postpone the [proposal] date even further, as it often misses its own rulemaking targets.. No attorney-client or confidential relationship is formed by the transmission of information between you and the National Law Review website or any of the law firms, attorneys or other professionals or organizations who include content on the National Law Review website. An increase to the standard minimum salary level will apply to exempt executive, administrative, and professional employees who are subject to the FLSAs salary basis test. Theres more. Comments must be submitted by 11:59 pm 60 days from the Federal Register publication in order to be considered. Learn how SHRM Certification can accelerate your career growth by earning a SHRM-CP or SHRM-SCP. In September 2019, the Trump DOL issued a new overtime rule, which took effect on January 1, 2020, raising the weekly minimum salary for EAP exemptions from $455 per week ($23,660 per year). Such bonuses include, for example, nondiscretionary incentive bonuses tied to productivity and profitability. Overtime Pay | U.S. Department of Labor Does the proposed rule change how employers may use bonuses to satisfy the salary level for highly compensated employees (HCEs)? "Higher salary requirements could cut into their already slim profit margins or require them to reclassify a substantial number of employees. If you raise an employees pay to maintain the exempt status, are you willing to keep them in the same bonus program? If you would ike to contact us via email please click here. Short-Term, Limited Duration Insurance: How Long Is Too Long? Some industry experts predict that it will be a significant increase from the current $684 per week ($35,568 per year). The U.S. Department of Labor has again extended its timeline for proposing a new salary threshold for overtime eligibility, this time to May, according to the agency's latest regulatory agenda,. Error logging in. This website uses cookies to understand your use of our website and to give you a better experience. The National Law Review - National Law Forum LLC 3 Grant Square #141 Hinsdale, IL 60521 Telephone (708) 357-3317 ortollfree(877)357-3317. Employee or Independent Contractor Classification Updating Davis-Bacon Regulations Form LM-10 Employer Report ("Persuader Rule") DOL/Employee Benefits Security Administration (EBSA) Definition. proposed changes. By contrast, California requires the primary duty to occupy at least 51 percent of the employee's time, and the performance of those duties cannot be done while the employee also performs nonexempt duties, he explained. Please log in as a SHRM member before saving bookmarks. $("span.current-site").html("SHRM China "); Before we answer this, you have to keep in mind this administrations goal: it wants to make more employees eligible for overtime. } The Severability of Wind Rights from a Surface Estate. Ensuring the salary threshold and duties tests complement one another and that one test doesn't dominate the other is critical to ensure correct classification, he noted. Overtime Proposed Rule Release Planned in May - HRCI The2016 rule also called for an automatic increase in the salary threshold every three years. Be paid at least the designated minimum weekly salary; and, Adjustments to the exempt duties tests; and/or. [CDATA[/* >