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Employers Facing New Rules on Overtime, Reporting Pay Data

Early March has come in like a lion for employers, who are now facing potential new federal rules on overtime and classification, as well as changes to how much information they need to be reporting to the Equal Employment Opportunity Commission regarding pay rates broken down by gender and race.

Labor Department Proposes Expanding Overtime Coverage

The Department of Labor (DOL) has proposed new rules mandating when certain workers must receive overtime pay. Under the proposed rule, made public on March 7, 2019, to be exempt from overtime, an employee would have to earn a salary threshold of $35,308 per year, up from $23,660.

No changes have been proposed to the exempt duties tests, so in addition to meeting the salary threshold, an exempt employee’s job must still involve primarily executive, administrative or professional duties. The DOL anticipates that over 1 million additional Americans would become eligible for overtime pay under the proposed rule.

The current overtime rules have not been updated since 2004, during the Bush administration. The Obama administration had proposed a higher minimum salary, mandating overtime pay to those earning less than about $47,000 annually. A federal judge in Texas suspended the rule, however, just as it was about to take effect.

Unless exempt, employees covered by the Fair Labor Standards Act must receive at least time and one-half their regular rate of pay for any time worked in excess of 40 hours in a workweek.

The newly proposed rule is subject to a 60-day comment period. A final rule will be published after comments have been considered. The DOL anticipates the rule will become effective January 2020.

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