United States Department of Labor Issues
New Overtime Regulations

Some of you may remember that in May of 2016, under the Obama administration, the U.S. Department of Labor (DOL) issued proposed revisions to the overtime regulations. The biggest change for employers was that the minimum salary threshold to meet the salary level test of the Fair Labor Standards Act (FLSA) would increase from the present $23,660.00/year to $47,476.00/year. The new minimum threshold was scheduled to go into effect on December 1, 2016. However, just days before it was scheduled to go into effect, a federal judge in Texas blocked the new rule.

On March 8, 2019, the DOL announced a Notice of Proposed Rule-making which would make more than 1.3 million more American workers eligible to be paid overtime whenever they work more than 40 hours within a one week period of time. The new proposal would boost the minimum salary level from the present $23,660.00/year to $35,308/year ($679.00 per week).

On September 24, 2019, the final new overtime rule was issued. It will be effective for all employers as of January 1, 2020. The final rule modifies the proposed rule somewhat. The final rule raises the salary threshold to $35,568/year ($684.00/week). This means that as of January 1, 2020, any employee who is making less than $684.00 per week must be paid overtime for any week in which that individual works more than 40 hours.

Employers should immediately begin the process of determining who in the organization is presently classified as Exempt from being paid overtime and whether or not those individuals will need to have a salary increase in order to meet the new minimum salary threshold.

A company’s best defense against the potential expense and aggravation related to federal or state law violations is to proactively review and revise as needed all Human Resources policies, handbooks, hiring procedures, compensation, benefits, training programs, communications tools and other functions. The professionals of PHHR are ready to assist your organization with this type of training as well as to maintain compliance with the latest state and federal mandates.

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Paul Hilton is a certified Human Resources Consultant, located in Columbia, SC.
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