The United States Department of Labor issued a new rule on Wednesday that updates the regulations determining which white-collar, salaried employees are entitled to the Fair Labor Standards Act’s minimum wage and overtime pay protections.
The rule increases the salary threshold below which most white-collar, salaried workers are entitled to overtime from the current $455 per week (or $23,660 for a full-year worker) to $913 per week (or $47,476 for a full-year worker), according to a Department of Labor media release.
In 2014, President Obama directed the Secretary of Labor to update the overtime regulations to reflect the original intent of the Fair Labor Standards Act, and to simplify and modernize the rules so they’re easier for workers and businesses to understand and apply. The department has issued a final rule that will put more money in the pockets of middle class workers – or give them more free time.
The final rule will:
• Raise the salary threshold indicating eligibility from $455/week to $913 ($47,476 per year), ensuring protections to 4.2 million workers, including 76,000 in Washington state.
• Automatically update the salary threshold every three years, based on wage growth over time, increasing predictability.
• Strengthen overtime protections for salaried workers already entitled to overtime.
• Provide greater clarity for workers and employers.
The final rule will become effective on Dec. 1, giving employers more than six months to prepare. The final rule does not make any changes to the duties test for executive, administrative and professional employees.
In response to the overtime rule, employers can:
• Pay time-and-a-half for overtime work.
• Raise workers salaries above the new threshold.
• Limit workers hours to 40 per week.
• Some combination of the above.
U.S. Sen. Patty Murray (D-Wash.) released the following statement in response to the overtime rule. She said the rule will give overworked Americans back precious time with their families by incentivizing employers to hire additional workers or give part-timers more hours that they want and need. Employers will no longer be able to force low-paid employees to work those extra hours for free. Murray has been a leading voice in Congress encouraging the Obama Administration to update overtime protections.
“In this country, hard work should pay off, and when workers put in extra hours on the job, they should be paid fairly for it,” said Murray. “But far too many Americans have been working longer and longer hours without being fairly compensated, as businesses take advantage of weak, inadequate and outdated overtime rules.
“These updated worker protections will make a meaningful difference in the lives of millions of workers and their families across the country and in my home state of Washington. Strengthening basic worker protections like this will help our economy grow from the middle out, not the top down and will help ensure our economy works for everyone, not just the wealthiest few.”
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