Department of Labor Announces New Overtime Pay Regulations

Posted by: Chris

The fight to establish new overtime regulations began in 2014 when the Obama administration attempted to double the salary limit to ensure that more workers would qualify for overtime pay. This change never went into effect, but the fight to change the overtime laws continued. Five years later, the fight is finally over now that the Department of Labor (DOL) has officially announced new overtime pay regulations.

What is the Current Overtime Pay Law?

Federal law states that employers must pay eligible employees overtime if they work more than 40 hours in a single workweek. Overtime pay must be equal to at least one-and-a-half times the employee’s regular rate.

The current law classifies workers as either exempt or non-exempt. Exempt employees are not entitled to overtime pay, whereas non-exempt employees are. A worker must pass three “tests” in order to be classified as an exempt employee, including a salary test. Under the current law, an employee passes this salary test if he makes more than $455 per week or $23,660 per year. 

For example, let’s say an employee earns a salary of $25,000 per year. Assuming he passes the other two overtime tests, this employee is not entitled to overtime pay. His salary is above the $23,660 limit, which means he is an exempt employee. 

What is the New Overtime Pay Law?

The DOL recently announced a new overtime pay law that increases the salary limit to $684 per week or $35,568 per year. This means an employee is entitled to overtime pay if he makes less than $684 per week or $35,568 per year. 

The Obama administration’s initial plan would have made over 4 million workers eligible for overtime pay for the first time. However, the DOL’s new overtime pay law will only expand the right to overtime pay to about 1.3 million workers in the U.S. 

Even though the DOL has officially announced this change, it will not go into effect until January 1, 2020. For now, workers must still use the $455 per week or $23,660 per year salary test to determine whether or not they are eligible for overtime.

If your employer refuses to pay overtime, contact Armstrong & Vaught, P.L.C. at once. Let our experienced attorneys seek justice against your employer for violating your workplace rights. Call us now at 918-582-2500, toll free at (800) 722-8880, or contact us online for a free consultation with a skilled attorney.