The Department of Labor’s [DOL] proposal to update overtime regulations has been on the radar for many of today’s business leaders these past few months. Last week on March 14th, the DOL submitted its final changes on the proposed overtime regulations to the Office of Management and Budget [OMB].
What does this mean? Once the OMB finishes its review, the final rule will then be published in the Federal Register. The review may take anywhere from weeks to months before being finalized, and the updated rulings will have to take effect within 60 days of the publishing date.
As a reminder, the key provisions of the DOL’s proposed rule are:
- Raising the threshold under which most salaried white collar workers are guaranteed overtime. As proposed, this would raise the salary threshold from $455 a week [$23,660 a year] to a projected level of $970 a week [$50,440 a year] in 2016.
- Increasing the total annual compensation requirement needed to exempt highly compensated employees [HCEs] to $122,148 annually.
- Providing greater clarity for employers so they can determine more easily if they should be paying overtime compensation.
- Automatically updating the salary threshold based on inflation or wage growth over time.