On March 7, 2019, the U.S. Department of Labor (DOL) issued updates to the long awaited overtime rule. Previously, the Obama administration issued a final regulation in 2016 that would have raised the salary threshold from $23,660/year ($455/week) to $47,476/year ($913/week). That regulation was later invalidated by a federal district judge and that decision is currently on appeal in the 5th Circuit.
Key provisions of the new proposal include:
- Salary Threshold – Raised to $35,308/year ($679/week)
- Future Salary Updates – Does not implement automatic updates, but the proposal seeks comment on conducting regularly scheduled rulemakings to update the salary threshold consistent with the methodology used in this proposal.
- Duties Test – Does not change the duties test.
- Highly Compensated Employees – Increases the total annual compensation requirement for “highly compensated employees” (HCE) from the currently-enforced level of $100,000 to $147,414 per year.
- Salary Test – Would allow nondiscretionary bonuses and incentive payments (including commissions) paid at least annually to satisfy up to 10 percent of the standard salary test requirement.