?The Biden administration is being pressured again to sharply increase the overtime salary threshold for exemption from overtime pay. In a tweet on Aug. 30, Progressive Caucus Chair Rep. Pramila Jayapal, D-Wash., revived a call to increase the threshold to more than $82,000 per year. We’ve gathered articles on the news from SHRM Online and other outlets.
Current Threshold Described as Too Low
“The current level of the federal guarantee for overtime pay is so low that it covers only about 15 percent of full-time salaried workers—forcing millions to essentially work any hours above 40 per week for free, at a time when they cannot afford to do so,” Jayapal tweeted. “As part of our Progressive Caucus Executive Action Agenda, released in March and again in a letter to Labor Secretary [Marty] Walsh in June, we asked the administration to raise the salary threshold to above $82,000 per year, which would cover 55 percent of workers at one-and-a-half times their regular pay, and give millions of people a raise.”
(Twitter)
Increase in Threshold on Horizon?
Under the current overtime rule, the maximum annualized salary rate is $35,568. Employees who make less than $684 per week are eligible for overtime pay at a rate of one and one-half times their regular rate, for any hours worked over 40 during a workweek. The Department of Labor (DOL) is feeling pressure to raise the salary rate to the level that the Obama administration tried to establish, which was $47,476.
(Hall Benefits Law via Lexology)
Obama Overtime Rule Blocked
A federal judge blocked the Obama administration’s overtime rule, which would have doubled the Fair Labor Standards Act’s salary threshold for exemption from overtime pay.
Trump Administration Raises Salary Threshold
The Trump administration subsequently raised the salary threshold from $23,660 per year to $35,568 annually. At the end of last year, more than 100 unions and advocacy groups called on the DOL to raise the salary threshold for exempt workers to $73,551 per year and to $82,745 annually by 2026.
Proposed Overtime Rule Projected to Be Issued This Fall
In its spring regulatory agenda, the DOL announced that its proposed overtime rule is tentatively slated to be released in October. In addition to an anticipated increase in the salary threshold for exempt workers, the department may conform the federal rules on duties that must be satisfied to be exempt to resemble California’s standards, according to Robert Boonin, an attorney with Dykema in Ann Arbor, Mich. The California standards require that more than 50 percent of the employee’s time be spent solely on performing exempt duties in order to be classified as exempt, he noted.
