The Department of Labor’s Wage & Hour Division announced a proposed rule change today that would extend overtime protections to approximately 5 million additional workers by increasing the salary cap for workers that fall under the white collar exception to the overtime rule, which the Department said has threatened to eat the current overtime rule without automatic cost-of-living increases over the years.  According to the Department, the “[f]ailure to update the overtime regulations has left an exception to overtime eligibility originally meant for highly-compensated executive, administrative, and professional employees now applying to workers earning as little as $23,660 a year.”  The Department further noted that “the proposed rule is consistent with President Obama’s goal of ensuring that workers are paid a fair day’s pay for a fair day’s work,” which is a common theme running through the Department’s materials.

 This is a good time for employers to evaluate how the proposed changes would likely impact their businesses and to evaluate their bottom lines so that they can develop a proactive implementation plans ahead of their annual budget cycles while the Department takes public comment on the proposed rule.  Good planning will be the key to a smooth transition.

 

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