City Personnel Blog

New Overtime Rules on the Horizon

March 11, 2019
The Labor Department unveiled a long-awaited proposal to make more workers eligible for overtime pay, but what does that mean for employers?
Business NewsNew Overtime Rules on the Horizon

It’s possible that millions of people will be eligible for overtime pay with the forthcoming federal overtime regulation, which might mean a steep hike in costs for employers.

The US Department of Labor has proposed an increase in the salary-level threshold for white-collar exemptions to $35,308 per year from $23,660 for employees who are counted as exempt, or unable to earn overtime pay. Raising the salary threshold could vastly increase the number of salaried workers who are eligible for overtime pay to include some employees classified as:

  • Executives—like project managers and VPs.
  • Administrative employees—like accountants, marketers, and PR reps.
  • Professionals—like lawyers, dentists, and writers.

So if you employ a secretary, a copywriter, a dental assistant, or another employee who was previously exempt, if they earn less than the salary threshold issued next year, that may no longer be the case.

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Currently, salaried employees who are managers and those with certain “specialized skills”—like a professional degree or training in a specific field, such as medicine—are exempt from being able to earn overtime pay if they make:

  • More than $455 per week; or
  • Over $23,660 a year

The Labor Department called for public comment on its proposed overtime threshold, as well as whether it should be periodically increased to reflect inflation. More information about the proposed rule is available at www.dol.gov/whd/overtime2019.