Potentially significant policy changes are on the horizon regarding federal rules that determine how and whether workers are entitled to overtime pay. Businesses hoping to avoid overtime obligations for hourly workers must jump through three hoops in most cases. One of those hoops is to pay at least the minimum salary set by the U.S. Department of Labor.
Last year, the Labor Department under the Obama administration more than doubled the minimum salary threshold that is exempt from overtime, raising it from $23,600 to $47,476. But the salary increase proposal was stiff-armed by a Texas federal judge’s injunction before the change could take effect. While not endorsing the Obama-era regulations, newly appointed Labor Secretary Alexander Acosta mused in recent congressional testimony that the current salary threshold is too low and should be raised to somewhere around $33,000.
The DOL is now seeking comment on how the overtime exemptions should be determined, as well as issues including whether salary levels should be allowed flexibility based on various factors, such as size of employer or region of employment, says employment attorney Audrey Mross of Dallas-based Munck Wilson Mandala.
There’s a lot on the line for employers who could be affected by these changes, she said. More than anything, employers are seeking consistency in order to plan for the future. This information-gathering phase provides parties a chance to be heard. If the salary threshold for exemption does increase, employers will be making hard decisions about whether to raise affected worker pay to maintain overtime exemptions or closely monitor worker hours, or otherwise be prepared to start paying overtime.
To speak with Audrey Mross about the Fair Labor Standards Act regulations, contact Robert Tharp at 214-559-4630 or Robert@androvett.com.