It used to be that a trade-off for having the security of an annual salary as opposed to being paid by the hour was that as an “exempt” salaried worker, you didn’t receive overtime pay. You worked as many hours as your manager needed you to or as the job required with no additional compensation.
That has gradually changed. Currently, salaried employees who earn less than approximately $35,600 annually are entitled to overtime pay under federal law.
However, many Americans still find themselves “promoted” to salaried positions so their employers can require them to work long hours without having to pay overtime. This practice is particularly common in the restaurant and construction industries, but it can occur anywhere.
What changes are in the proposed rule?
Now the U.S. Department of Labor (DOL) is proposing a rule that would raise that annual salary threshold to about $55,000. That would make approximately 3.6 million more salaried employees throughout the country eligible to receive overtime pay. Further, that threshold would automatically increase every three years.
According to the DOL, between the added overtime paid to salaried employees and the salary increases some employers may choose to implement to avoid having to pay overtime, the proposed rule, as currently written, would put an additional $1.2 billion in the pockets of American workers. In its announcement of the proposed rule, the DOL explained, “Many low-paid salaried employees work side-by-side with hourly employees, doing the same tasks and often working over 40 hours a week.”
Business groups are opposing it
The proposed new rule isn’t a done deal. Not surprisingly, a number of groups representing various types of business owners are already speaking out against it. They claim they can’t afford the added costs while they’re still recovering from the economic downturn that occurred several years ago.
These groups and others who want to comment on the proposed rule have 60 days to do so and have their comments considered. The DOL will then publish a final rule.
Most people don’t have the time or the interest to keep up with every law and regulation that affects their rights as an employee. They often assume that their employers are abiding by the law. Unfortunately, that’s not always the case. If you’re not being paid what you’re entitled to and haven’t been able to resolve the issue with your employer, it may help to seek legal guidance.