Following months of extensive consultations with employers, workers, unions, and other stakeholders, on July 6th the Department of Labor released its proposal to update and revise regulations to extend overtime pay to nearly 5 million workers. As proposed, the rule would guarantee overtime pay to most salaried white collar workers earning less than an estimated $50,440 next year.
Key provisions of the proposed rule include:
- Raising the threshold under which most salaried white collar workers are guaranteed overtime to equal the 40th percentile of weekly earnings for full-time salaried workers. As proposed, this would raise the salary threshold from $455 a week ($23,660 a year) to a projected level of $970 a week ($50,440 a year) in 2016.
- Providing greater clarity for millions more workers so they – and their employers – can determine more easily if they should be receiving overtime pay.
- Preventing a future erosion of overtime protection and ensuring greater predictability by automatically updating the salary threshold based on inflation or wage growth over time.
The Notice of Proposed Rulemaking also discusses the current duties test to qualify for the exemption, and requests comments on the current requirements. We also seek comment on the possibility of including nondiscretionary bonuses to satisfy a portion of the standard salary requirement.
The comment period on the proposed rule is open through September 4, 2015. We encourage you to submit your written comments on the Regulations.gov website here.
The Department will consider all comments received in developing the final rule. We sought out a great deal of input in drafting the proposal, and look forward to receiving as much input as possible from all interested stakeholders during the comment period.