The Department of Labor yesterday released a long-awaited proposal revising the requirements for employees to be exempt from overtime pay under the Fair Labor Standards Act. The proposal would more than double the salary basis test -- the level below which all employees must be paid overtime beyond 40 hours per week, regardless of their duties -- from the current level of $455 per week (or $23,660 per year) to $921 per week (or $47,892 per year).
The proposal would also increase the total annual compensation requirement for highly compensated employees to $122,148 and establish a mechanism for automatically updating the salary and compensation levels going forward to ensure that they will continue to provide a useful and effective test for exemption. DoL did not propose changes to the duties tests under FLSA, but it did request comment on whether the tests should be changed.
ABA is part of a coalition of employer groups -- the Partnership to Protect Workplace Opportunity -- that will respond to the proposal. Comments are due 60 days after publication in the Federal Register. To help bankers understand the proposal, ABA will host a briefing on July 30 at 2 p.m. EDT.
Read the summary of the rule.