New DOL Rule Makes 1.3 Million Workers Eligible for Overtime Pay

This week, the United States Department of Labor (“DOL”) finalized a new rule that increases the salary threshold required for executive, administrative, or professional (“EAP”) workers to qualify as exempt from overtime under the Fair Labor Standards Act (“FLSA”).  The new DOL rule requires employers to pay overtime to EAP employees that earn less than $35,568 annually or $684 per week, a significant increase from the current levels of $23,660 per year or $455 weekly.  The DOL estimates that an additional 1.3 million workers will become eligible for overtime pay once the rule goes in effect on January 1, 2020. 

The increases in salary levels are long overdue as this is the first raise in minimum threshold salaries for overtime exemptions under the FLSA since 2004.  Under President Obama, the DOL sought to raise the minimum threshold to $47,476 per year, but its efforts were blocked from implementation by a federal judge in Texas in December 2016.  While the new DOL rule falls short of providing the same salary threshold as the 2016 version, it will significantly benefit workers in many industries, including education, health services, wholesale trade, retail trade, and manufacturing. 

In addition to protections under the federal FLSA, workers in several states, including New York, are protected by State and local laws that ensure overtime pay when employers fail to meet a threshold even higher than the newly proposed DOL rule.  For instance, restaurant employees in New York City must be paid a weekly salary greater than $1,125, or $58,500 per year, to be exempt from overtime.  Workers that believe their employer is improperly withholding overtime wages should speak to an attorney to investigate their claims.