Notice of Proposed Rule Making: Overtime Update

April 1, 2019

On March 7, 2019 the Department of Labor announced a proposed rule that would make more than a million more American workers eligible for overtime.  The question to start asking yourself and your managers is "how will this rule affect our business?"

Under currently enforced law, employees with a salary below $455 per week ($23,660 annually) must be paid overtime if they work more than 40 hours per week.  Workers making at least this salary level may be eligible for overtime based on their job duties. This salary level was set in 2004.

This proposal that is expected to be passed into law would boost the proposed salary level to $679 per week (equivalent to $35,308 per year.) Above this salary level, eligibility for overtime varies based on job duties.

The proposal increases the total annual compensation requirement for "highly compensated employees" (HCE) from the currently enforced level of $100,000 to $147,414 per year.

A commitment to periodic review to update the salary threshold as well as a requirement for notice and comment periods for the rule would be mandated.

The proposal would allow employers to use nondiscretionary bonuses and incentive payments (including commissions) that are paid annually or more frequently to satisfy up to 10% of the standard salary level.

There were no changes in overtime protections for:

-Laborers including; non-management production-line employees.

- Non-management employees in maintenance, construction and similar occupations such as carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers and construction workers.  These employees must continue to be paid for overtime as established in the law that went into affect in 2004.  

Source:  Callie Haman, National Association of Manufacturers

The question all owners must be asking their managers are there ways to ensure the company is not accruing any unnecessary overtime and can anything be done to reduce your exposure as this will definitely affect the company's bottom line?

Since 1929 the WPMA has always prided itself on providing it's members with timely information that helps a company remain competitive in the global marketplace.

For more information, you may contact Philip Bibeau, Executive Director at 978/874-5445.

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