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Federal Rule Could Make More Salaried Workers Eligible For Overtime Pay

Last updated on July 1st, 2015 at 02:46 pm

President Obama is expected to formally announce a new rule from the Department of Labor (DOL), raising the salary threshold under which employees must be paid overtime rates for hours worked.
Currently, that salary threshold is $455 per week, or $23,660 per year. The proposed DOL rule would dramatically increase that amount to a number equal to the 40th percentile of weekly earnings for full-time salaried workers—currently $970 per week, or $50,440 annually. The threshold would then automatically adjust to stay at that 40th percentile number as wages change over time.

The updated figures come as a result of Obama’s 2014 directive requiring the DOL to review the provisions of the Fair Labor Standards Act that govern the federal regulation of overtime pay.

The proposal is expected to be formally published July 2. The announcement will kick off a formal 60-day comment period where the public may share its thoughts on the proposal with the DOL and the White House. The administration’s goal is to ensure that the new rules go into place before the president leaves office in January 2017, although the administration does expect the final rule to be challenged in court, according to reports. Congress is expected to weigh in with its opinion on the rule but has no direct authority to change the rules without enacting a new statute.

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