By
Jeanette Coleman, SPHR & SHRM-SCP
on
Apr
12,
2019
3 min read
2 Comments
Just last month the U.S. Department of Labor (DOL) announced the proposed changes to the Fair Labor Standards Act (FLSA) overtime rule. The proposed changes include an increase in the overtime salary threshold for white-collar exempt employees to $35,308 per year, up from the previous threshold of $23,660 per year.
President Obama tried unsuccessfully in 2016 to double the salary level exemption from $23,660 to $47,476. Had that increase gone into effect, around 4 million more salaried workers would have been eligible for overtime pay.
While the proposed figure is not as stringent as the Obama-era recommendation, if finalized more than 1 million U.S. workers who are not currently eligible for overtime pay under federal law will become eligible. Employers will face higher payroll costs as eligible workers must receive at least time and one-half their regular pay rate for hours worker over 40 in a workweek.
Now that the DOL has announced the proposed changes to the FLSA overtime rule, the agency will have to complete a period of public review and comment before the rule can take effect. That’s at least some good news for small and mid-sized employers, because it will give them time to prepare to meet the new overtime standard.
Employers can take these steps right now to mitigate repercussions of the impending FLSA changes:
The new overtime rules will require small and medium-sized companies make changes in how they classify and compensate many of their employees. Take steps now to estimate how your business will be affected, and begin planning for any adjustments you need to make to be ready for the change.