DOL’s Proposed Salary Basis Rule Will Make More Employees Eligible for Overtime

Labor and employment attorneys Melissa Healy and James Dale authored an article for the Idaho Business Review titled “Department Of Labor’s proposed salary basis rule will make more employees eligible for overtime,” published April 23, 2019. In the article, Healy and Dale discuss the changes to overtime law that would occur if a proposed rule published by the Department of Labor in March is finalized.

The rule would:

• Increase the weekly amount that employees must make to be potentially exempt from overtime.
• Allow employers to use nondiscretionary bonuses and incentive payments paid at least annually to satisfy up to 10 percent of the salary threshold in the first bullet.
• Raise the yearly pay an employee must reach for that employee to be considered “highly compensated.”
• Mandate that the DOL makes periodic reviews of and updates the minimum salary threshold.

Interested parties have until May 21, 2019, before the rule is finalized, though the rules may be later challenged through litigation.

The authors conclude with advice for employers: “There are no specific steps to take with respect to the proposed rule right now. However, there is no time like the present to review job duties and salaries to make sure your employees are properly classified as exempt and non-exempt. The cost of addressing misclassification issues on the front end is insignificant compared with the potential costs associated with litigation.”