New salary thresholds for overtime exemptions are outlined in the DOL’s new proposed rule.
The U.S. Department of Labor (DOL), on Thursday, March 7, introduced a new proposed “white collar rule” also known as the salary threshold for the overtime pay exemption. The DOL expects the new rule to begin in January 2020.
According to the National Law Review, the DOL’s proposal includes upping the minimum salary for executive, administrative and professional employee exemptions from $455 per week ($23,660 per year) to $679 per week ($35,308 per year).
The National Association of Convenience Stores (NACS) pointed out that this is slightly above adjusting the current salary threshold for inflation—about $33,000 annualized.
This is much lower than the proposal set forth under the Obama administration on May 23, 2016 that placed the salary threshold—under which all salaried employees must be paid overtime—at $913 per week ($47,476 per year). That proposal was invalidated by a federal court in Texas and never implemented.
According to the DOL, $679 per week is in line with the projected 20th percentile of earnings for full-time salaried workers in the lowest paid census region and retail sector.
NACS reported that the salary threshold is also in line with the average salary of store managers in the convenience store industry, based on NACS State of the Industry data.
The DOL also proposed adjusting the salary threshold every four years via a notice of proposed rulemaking. There will also be no changes to the “duties tests,” which review an employee’s job responsibilities to see if they are eligible for any of four main exemptions under the rule.
NACS pointed out that the DOL proposal is in line with what NACS had previously argued for in its response to the department’s requests for information. “NACS argued that the department should use the same methodology when the rule was updated in 2004, that it should be reviewed and updated no more than every three years, and that updates should be subjected to standard notice and comment rulemaking. Under the new proposal, the DOL has reverted to the 2004 methodology with reviews subject to the formal notice and comment process,” NACS reported.
NACS staff and counsel are reviewing the full proposal and will file new comments with the DOL. NACS will also assist NACS members that would like to file their own comments. Comments will be due 60 days after the proposal is published in the Federal Register.