DOL Proposes New Rule for Overtime Eligibility

On March 07, 2019, the United States Department of Labor (“DOL”) proposed to increase the salary threshold required for executive, administrative and professional (“EAP”) workers to qualify as exempt from overtime under the Fair Labor Standards Act (“FLSA”).  Once finalized, the DOL rule will convert more than one million workers – earning between $23,660 and $35,308 annually – to non-exempt status and thus eligible to receive overtime pay.  Indeed, the DOL proposal requires employers to pay overtime for EAP workers that earn less than $35,308 per year or $679 per week.

This is the first raise to the minimum threshold for overtime exemptions under the FLSA since 2004.  Under President Obama, the DOL sought to raise the minimum threshold to $47,476 per year, but its’ efforts were blocked from implementation by a Texas federal judge in December 2016.  While the proposed DOL rule falls short of providing the same salary threshold as the 2016 version, it projects to significantly benefit workers in many industries, including education, health services, wholesale trade, retail trade, and manufacturing.

In addition to protections under the federal FLSA, workers in several states, including New York, are protected by State and local laws that ensure overtime pay when employers fail to meet a threshold even higher than the newly proposed DOL rule.  For instance, restaurant employees in New York City must be paid a weekly salary greater than $1,125, or $58,500 per year, to be exempt from overtime.  Workers that believe their employer is improperly withholding overtime wages should speak to an attorney to investigate their claims.