U.S. Labor Dept. proposes updated rules for overtime pay

Mar 14, 2019
Written by wpengine

The U.S. Labor Department has proposed new rules that would make more than a million more workers eligible for overtime pay.

The DOL has proposed raising the salary threshold to qualify for overtime pay from $455 weekly ($23,660 yearly) to $679 weekly (or $35,308 yearly). That means employees earning less than the new threshold would have to be paid overtime if they worked more than 40 hours a week. More details about the proposal are here.

In 2015, the Obama Administration proposed new rules that were subsequently enjoined from implementation, in part, due to the high salary threshold proposed in those rules. Obama’s proposal would have made non-exempt employees earning less than about $47,000 a year eligible for overtime pay.

The current $455 per week salary threshold was set in 2004.

Over the last year, Washington’s Department of Labor and Industries (L&I) has been studying whether to independently raise the salary threshold for workers in Washington State. During the year-long process, Washington Retail has consistently urged state officials to remain aligned with federal standards and to delay any action until the federal proposal was made public.

L&I has indicated it will propose to increase the salary threshold to between $56,000 and $70,000 yearly. At those levels, employers would be required to reclassify any employee with an annual compensation at or below the threshold as a non-exempt employee requiring overtime pay.

If L&I proposes such changes, it would deviate from the current law and historical practice of aligning state overtime standards with the federal government. It will also create havoc for employers due to the need to reclassify many currently exempt employees as non-exempt employees.

The public is invited to submit written comments on the federal proposal at www.regulations.gov in the rulemaking docket RIN 1235-AA20.

(WR contract lobbyist Bruce Beckett contributed to this report).