09 May 2019 US Department of Labor proposes revisions to the overtime rules The US Department of Labor in March 2019 issued long-awaited proposed regulations that would extend federal overtime pay to workers, an effort that was thwarted in 2016 when the courts halted changes implemented by the Obama Administration that would have gone into effect December 1, 2016. Had the 2016 rule changes proceeded forward, the salary threshold for salaried-exempt employees, which would have been adjusted every three years for inflation, would have been $913 per week ($47,476 per year). Additionally, the annual salary threshold at which the salaried-exempt duties' test is relaxed for certain highly compensated employees would have been $122,148 per year (up from the current $100,000). It was estimated that the 2016 rule changes would have extended overtime pay to an estimated 4.2 million employees. (Email from President Obama, May 17, 2016.) The US Department of Labor under the Trump Administration proposes milder changes to the rules, expanding overtime pay to an estimated 1 million (as compared the estimated 4.2 million under the 2016 rule change). The Department states that in developing these rule changes, it relied on extensive public input including six in-person listening sessions held around the nation and more than 200,000 comments. Following are highlights of the changes that would be effective 60 days following the publication of the final rules.
"Regulatory Information Number (RIN) 1235-AA20" and submit them electronically through the Federal eRulemaking Portal http://www.regulations.gov or mail them to Melissa Smith, Director of the Division of Regulations, Legislation, and Interpretation, Wage and Hour Division, U.S. Department of Labor, Room S-3502, 200 Constitution Avenue NW, Washington, DC 20210. For access to the docket to read background documents or comments, go to the Federal eRulemaking Portal at http://www.regulations.gov. Should the standard salary tests be revised, employers should consider the extent those changes will increase their employment tax expense. The unemployment insurance wage base and/or tax rate schedules are tied directly to the average annual wage in some states (e.g., Washington), and in these states, higher overall wages could mean a bump in employers' unemployment insurance taxes. If additional employees are hired to avoid overtime costs, employers should consider the employment tax impact of restarting the wage base for added employees (e.g.; Social Security and unemployment/disability insurance.)
Document ID: 2019-0894 | |||||||
