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Friday, March 8, 2019

Proposed Salary Threshold Overtime Regulations are Here!

On Thursday, the U.S. Department of Labor released its long-awaited proposed regulations on the executive, administrative, and professional exemptions to the overtime rule under the Fair Labor Standards Act. Read the DOL’s official news release here.

Under the proposal, the salary threshold would increase from the current $455 per week to $679 per week ($35,308 per year). The threshold would also be subject to review and possible adjustment through new rulemaking every four years. Under regulations issued by the Obama Administration but blocked by a court, the threshold would have jumped to $913 per week, or $47,476 per year, and tied to costs of living thereafter.
The DOL has stated that proposed regulations would not change the "duties tests." Public comments will be accepted for 60 days after the proposed rule is published in the Federal Register, presumably early next week. The Final Regulation will become effective January 1, 2020

Common Sense Counsel: Constangy, Brooks, Smith & Prophete, LLP, will hold webinars on the new Final Rule and will issue follow-up bulletins as we continue to analyze the Rule. The key decision for Human Resources departments and management is whether to raise the salaries of currently exempt employees to $679 per week ($35,308), or to reclassify those employees to non-exempt status. If you are going to reclassify, you will need to determine the regular rate of pay for these employees in order to determine the proper overtime rate. This will require careful planning and consideration of a number of issues, not the least of which is how many hours of overtime are expected to be worked each week by the involved employee.

The East Alabama Society of Human Resources (EASHRM) will hold a briefing workshop soon.

Tommy Eden is a partner working out of the Constangy, Brooks, Smith & Prophete, LLP office in Opelika, AL and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com with Links to regulations on Blog. Send an email to eandrews@constangy.com if you wish to be placed on the free Constangy newsletter and webinar list.