On March 7, 2019, the U.S. Department of Labor (DOL) unveiled its new overtime proposal in a notice of proposed rulemaking (NPRM), which would update the salary thresholds according to which workers are entitled to overtime compensation. According to the proposal, the new salary level will increase from $455 per week (which amounts to $23,660 annually) to $679 per week (which amounts to $35,308 annually). If the proposal becomes final, this would be the first increase to the salary level since 2004.
The NPRM updates the salary level with projections using current wage data to January 1, 2020. It also calls for periodic review—not automatic adjustments—to update the salary level, which would still require notice-and-comment rulemaking.
According to a DOL press release on the proposal, the NPRM does not change the overtime eligibility for a number of jobs, including “police officers, fire fighters, paramedics, nurses, and laborers including: non-management production-line employees and non-management employees in maintenance, construction and similar occupations such as carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, and construction workers.”
Secretary of Labor Alexander Acosta commented “At my confirmation hearings, I committed to an update of the 2004 overtime threshold, and today’s proposal would bring common sense, consistency, and higher wages to working Americans.”
The latest proposal comes after the DOL gathered input from interested parties at six in-person listening sessions that it held in cities across the United States in the fall of 2018 and from its July 2017 Request for Information (RFI) on the Part 541 overtime regulations. Commenting on the overwhelming public input, acting administrator for the DOL’s Wage and Hour Division Keith Sonderling noted, “Commenters on the RFI and in-person sessions overwhelmingly agreed that the 2004 levels need to be updated.”
In November 2017, the U.S. Court of Appeals for the Fifth Circuit granted a motion filed by the DOL to hold in abeyance the DOL’s appeal of a district court decision that invalidated controversial federal overtime regulations the Obama administration promulgated in 2016.
The new proposal is expected to be published in the Federal Register next week. The DOL has invited interested parties to submit comments about the new proposal for 60 days following the rule’s publication in the Federal Register.
Ogletree Deakins’ Wage and Hour Practice Group will continue to cover the proposed rule in depth on our Wage and Hour blog, which includes a variety of resources on the Part 541 overtime regulations and is frequently updated.
Employers interested in learning more about the latest wage and hour developments can join us for a one-hour webinar, “The New Overtime Proposal: What Employers Need to Know to Prepare,” on Monday, March 18, 2019, at 2:00 p.m. Eastern. Our speakers, Washington, D.C. shareholder Alfred B. Robinson, Jr. and Greenville, S.C. shareholder Charles E. McDonald III, will explain the new overtime proposal, its impact on employers, and what the future may bring. To register for this timely program, click here.