We have been waiting for the United States Department of Labor to announce its plan for toning down the overtime rule revisions implemented in the last administration, but stayed by federal courts, and to announce its own proposal. Now, that momentous event has happened—the agency announced yesterday it will set the salary threshold at $35,308 per annum.  The new level will go into effect in January 2020.  This amounts to a weekly salary of $679 per week.

The agency also announced that the Highly Compensated Exemption (HCE), now set at $100,000, will rise to approximately $147,000.  This figure is actually almost $13,000 higher than the Obama-administration proposal.

Significantly, there are no proposed changes to the duties test. Of equal significance is the fact that employers may utilize certain nondiscretionary bonuses and commissions to meet 10% of the new salary requirement.  The rule also proposed updating the salary level every four years but only after notice-and-comment periods that precede the increases.

The Takeaway

I think this is a reasonable compromise. The truth is that a salary of $700 per week is not a dramatic increase and the $455 per week threshold was too low.  This is fair and I believe that employers will not “go crazy” over the new salary level.

But, we will see…

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