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Blue binder labeled Overtime sitting on a deskMore than 1 million workers nationally would become eligible for mandatory overtime under a proposal unveiled late Thursday by the U.S. Department of Labor (DOL).

The new overtime rule would increase the threshold at which employees must be paid time-and-a-half for any time worked over 40 hours a week.  The new threshold would be $679 per week, or the equivalent of $35,308 per year. The current standard is $455 per week, or $23,660 per year.

“Our economy has more job openings than job seekers and more Americans are joining the labor force,” said DOL Secretary Alexander Acosta in a press release. “At my confirmation hearings, I committed to an update of the 2004 overtime threshold, and today’s proposal would bring common sense, consistency, and higher wages to working Americans.”

The proposed rule will be open for public comment for 60 days, with a final rule coming sometime after that.

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In addition to the salary change, the rule also would:

  • increase the total annual compensation requirement for “highly compensated employees” (HCE) from the currently enforced level of $100,000 to $147,414 per year.
  • commit to review to update the salary threshold periodically instead of including automatic COLA increases; and
  • allow employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the standard salary level.

While the rule is a big increase, it is considerably less dramatic than what the Obama administration’s labor department proposed in 2016. That rule would have increased the threshold to more than $47,000 per year and included annual increases going forward.  That rule was subject to an 11th-hour injunction and eventually was struck down by a federal judge in Texas.

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