Under current federal law, an employee who earns less than $455 per week ($23,660 annually) is required to be paid overtime when she works more than 40 hours per week.
In early March 2019, the United States Department of Labor announced a proposed rule that increases the threshold for overtime eligibility from $455 per week to $679 per week ($35,308 annually). Employers also should know that the proposed rule increases the total annual compensation requirement for “highly compensated employees” from $100,000 to $147,414 per year.
For purposes of meeting the threshold, employers may continue to use non-discretionary bonuses and incentive payments such as commissions to satisfy up to ten percent of the salary.
Overtime protections remain unchanged for police officers, firefighters, paramedics, nurses, and laborers such as non-management production line employees, non-management maintenance employees, carpenters, electricians, mechanics, plumbers, ironworkers, craftsmen, operating engineers, longshoremen, and construction workers.
If the rule is finalized, many American workers will become newly-eligible for overtime compensation. Employers should consider how this change will impact their existing pay practices so that they can prepare if the rule is finalized. We’ll be closely following the rule and reporting about updates on our blog.
Complying with overtime rules can be confusing because there are many exceptions. If you’re an employer with questions about your obligations under New York or federal law, contact us. The attorneys at The Coppola Firm would be glad to assist