Blog

Mar 19 2019

Overtime Change Revisited

By: Margaret Sheahan

Posted in: Wage & Hour

 

The big overtime exemption revolution of the Obama Era never happened, thanks to a US District Court ruling.  However, the USDOL, now operating as part of President Trump’s administration, revisited the issue and published a new proposed rule on March 7.  Like the last time this issue was in the news, the proposal would substantially increase the minimum salary “white collar” executive, administrative and professional positions must receive to qualify for the exemption from the requirement to be paid at one and one-half times their regular rate for all time worked over 40 hours in a workweek.    This time, however, the increase would be more modest, replacing the current $455 per week ($23,660 per year) standard with $679 per week ($35,308 per year).  This compares to $913 per week ($47,476 per year) under the Obama proposal.  Additionally, proposed provisions would permit some non-salary compensation to be counted toward the minimum, including qualifying commissions and bonuses.  The Obama proposal would have caused the minimum to change automatically in relation to the consumer price index.  This time, the proposal would have the USDOL revisit the issue every 4 years. 

A provision in the current federal wage and hour law that does not affect Connecticut employers would also be changed under this latest proposal.  Currently under federal law, an hourly paid employee with job content not matching any exemption, who makes $100,000 or more per year is not entitled to overtime pay.  The March 7 proposed rule would raise that earnings level to $147,414. Because employers must obey both federal and State law, and Connecticut does not have a companion provision, even such highly paid non-exempt workers are entitled to overtime premium if they work in Connecticut.

A 60-day comment period will start when the proposal is published in the Federal Register.  The estimate for the effective date of whatever change DOL decides to make after considering comments is January 2020. 


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