New overtime rule expected next year

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New overtime rule expected next year
New overtime rule expected next year

Expect action on a new federal overtime pay rule within the next 10 months.

The Labor Department, in its fall regulatory plan, said it expects to issue a notice of proposed rulemaking in October.

Through the rule, the department's Wage and Hour Division will propose an updated salary level that would determine which workers would be entitled to or exempt from overtime pay, according to the plan.

In a request for information published in July, the Labor Department sought input from the public on how and whether salaries, duties, cost of living, bonuses and incentives should factor into overtime pay, as well as whether salary level tests should be updated automatically. The department said its Wage and Hour Division is reviewing comments that were received by the Sept. 25 deadline.

Among the commenters was Argentum President and CEO James Balda, who told the Labor Department that it should base increases in the minimum salary threshold used to determine overtime pay on the 20th percentile for salaried employees in the lowest paid geographic region of the country. That methodology is what the department began using in 2004, Balda said.

Also answering the request to provide feedback was Cory Sanford, the director of human resources for assisted living operator Ashley Manor of Meridian, ID, and affiliates.

“At a minimum, we suggest completely eliminating the proposed automatic annual increases to the minimum salary and increase minimum salary to a more manageable and reasonable amount, such as $30,000 per year,” he said.

The Fair Labor Standards Act generally requires employers to pay their workers at least the federal minimum wage (currently $7.25 an hour) for all hours worked as well as overtime pay that equals at least 1.5 times the employee's regular rate of pay for any hours worked over 40 in a workweek. A rule finalized during the Obama administration would have doubled the salary threshold — from $23,660 to $47,476 per year — under which most salaried workers would be guaranteed overtime pay when they work more than 40 hours. That rule was declared unlawful by a federal judge earlier this year, however.

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