Dive Brief:
- According to multiple sources, the U.S. Department of Labor is set to lower the new threshold for overtime exemption to around $47,000.
- When the Labor Dept. issued the proposed overtime regulations released in July 2015, the speculation was the threshold would be $50,440, so the $47,000 number represents approximately twice the current minimum salary requirement for overtime exemption of $23,660.
- According to a White House press release issued last year, the $50,440 threshold was expected to affect five million white collar workers, though other calculations pushed that number up to 13.5 million workers. The new proposed threshold could affect up to 23% of the current workforce, or 12.5 million workers.
Dive Insight:
Regardless of whether it's $50,440 or the rumored $47,000, the new rule will undoubtedly create some bureaucratic headaches for employers who will need to begin tracking employee hours, including telecommuters. According to a recent SHRM survey, 67% of HR pros interviewed said if the new rules lead to increases in OT eligibility and pay, it's likely that employees will have decreased flexibility and autonomy.
Susan Fentin, of Skoler, Abbott & Presser, P.C., in Springfield, Mass., told BLR that rumors about the lower OT threshold doesn't make it clear whether the new minimum salary threshold will be fixed for another period of time (the last one was changed in the second Bush administration) or whether it will change from year to year, as was originally proposed by the Labor Dept.
Her firm "strongly" recommends that employers inclined to raise wages to maintain exempt classifications should take this opportunity to rework job descriptions and be sure that they meet the appropriate exemption. "Changing the minimum salary level might not address all the problems, and you might find yourself with a misclassification problem at a higher annual wage," Fentin said.
HR.BLR also reported that the new regs are expected to be made public "within the next two to three weeks."
