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DOL Issues New Overtime Rules

By: Evelyn Schonberg | 3/8/2019 | Category: Employment Law-Wage and Hour

Many of you will recall that in May 2016, the Department of Labor issued new rules that essentially doubled the salary and compensation levels needed for employees who are exempt under the executive, administrative and professional exemptions.  The new rules were to take effect December 1, 2016 and increased the standard salary level from $455 per week to $913 per week.  However, right before the new rule was to take effect, a federal court issued an injunction that enjoined the new rules from going into effect.

 

On March 7, 2019, the DOL finally issued its new proposed rule that proposes the following changes: 

 

·       Increase the salary level from $455 to $679 per week, or $35,308 per year;

 

·       Periodic reviews to update the thresholds every 4 years only after receiving comments on proposed changes (in the 2016 rule, automatic adjustments were mandated);

 

·       As in the previous rule, the DOL is not changing the duties test; and

 

·       The Highly Compensated Employee level would be increased from $100,000 to $147,414, of which $679 must be paid weekly on a salary or fee basis.   

 

There is a 60-day period in which written comments must be submitted to the DOL.  It is anticipated that the DOL will attempt to publish a finalized version of the rule before the 2020 election.  Lawsuits are very likely to be filed by worker advocacy groups as well as business groups.  Also, the Democrats in Congress are working on legislation that would enact the 2016 rule into law. 

 

As always, we will keep you updated as events unfold in this extremely important legal area.  For now, the changes are not expected to occur until at least the fourth quarter of 2019 and most likely early to mid 2020.  However, all employers must keep in mind the proposed new threshold in hiring and/or promoting employees into salary positions and deciding upon raises.  

The employment and labor attorneys at RBS are well versed in all matters relating to wage and hour compliance so please contact us with any and all questions.   

Ross, Brittain & Schonberg Co., L.P.A.

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