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The U.S. Department of Labor (DOL) published a Notice of Proposed Rulemaking (NPRM) raising the Fair Labor Standards Act (FLSA) salary test threshold to $35,308 per year ($679 per week).
This is significantly lower than the $47,476 per year ($913 per week) level proposed by the prior administration in 2016, but represents a significant increase to the current FLSA salary threshold of $455 per week or $23,660 per year. The DOL estimates that the proposed threshold would expand overtime eligibility to more than a million additional U.S. workers. Other key aspects of the proposal include:
The DOL will allow for 60 days of public comment to the proposed rulemaking. Once the comment period closes, the DOL will be required to review and consider all comments before finalizing and publishing the regulations. With an expected high volume of comments, it may take several months, but experts anticipate that the DOL will finalize the rules at the end of 2019 to be effective in early 2020.
The change can impact employer payroll costs. We can offer a couple of suggested action steps for employers:
If you have questions regarding this article, please contact FGMK’s Compensation Advisory Service Practice.
Donald Nemerov
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