DOL Raises Threshold for Mandatory Overtime for Salaried Employees

The U.S. Department of Labor has updated its overtime exemption rule, expanding the threshold for mandatory overtime for salaried employees. This means that the Fair Labor Standards Act’s executive, administrative, and professional (EAP) exemption from overtime now applies to those earning a salary of up to $35,568.

When the threshold was last updated, under the George W. Bush administration in 2004, it expanded to allow overtime rights for those making $23,660 or less. The new rule is expected to expand overtime eligibility to approximately 1.3 million more American workers who hadn’t been eligible under the Bush era rule.

The Obama administration had increased the mandatory overtime cutoff to $47,476, which would have expanded the group of workers eligible for overtime even more, to about 4 million more workers. That increase was nixed by a federal judge in 2017, however.

The new rule is set to take effect on Jan. 1, 2020.

“For the first time in over 15 years, America’s workers will have an update to overtime regulations that will put overtime pay into the pockets of more than a million working Americans,” said acting U.S. Secretary of Labor Patrick Pizzella in a statement.

In 1975, about 60 percent of salaried employees were under the salary threshold and therefore eligible for overtime. This is only the second time that threshold has been updated—the current $23,600 threshold, implemented in 2004, only covers about seven percent of salaried employees. The Obama administration’s proposed rule would have covered 33 percent of salaried employees, whereas this new rule from the DOL raises the threshold to include about 15 percent of salaried employees.

This new version of the DOL’s rule also nixed one of the essential components of the Obama administration’s proposed rule, which requires the EAP threshold for mandatory overtime for salaried employees to be increased every three years to account for inflation.

“The Trump administration is trying to portray this as some great gift to workers, but in fact it’s a rollback,” said Judi Conti, a director at the National Employment Law Project, speaking to the Washington Post. “Nobody should be fooled into thinking this is pro-worker. What this does is it locks in a low threshold at the behest of the business community.”

The DOL said that its reasoning behind dropping the regular required salary threshold increases from its new rule is because it would “deprive the department of flexibility to adapt to unanticipated circumstances.”

Filing an Overtime Lawsuit

Overtime is important for workers across the country, but certain workers are legally exempt from mandatory overtime pay under the Fair Labor Standards Act. This update to the overtime exemption rule allows fewer workers to be exempted, and therefore more are eligible for overtime wages.

In some cases, workers may be misclassified as exempt when they actually should be receiving overtime pay for their work. If you have worked as an assistant manager, department manager, or operations manager in a fast-food restaurant, retail store, or supermarket sometime in the last 3 years but were not paid overtime, you may benefit from speaking to an employment law attorney.

Join a Free Assistant Manager Overtime Pay Lawsuit Investigation

If you work or worked as an assistant manager at a fast-food restaurant, retail store or supermarket and you perform the same duties as the hourly employees, you may have been misclassified as exempt and are owed unpaid overtime pay.

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This article is not legal advice. It is presented
for informational purposes only.