The United States Department of Labor finalized the overtime rule that will expand overtime wages to more workers by raising the overtime salary threshold. This means that nearly all workers earning less than $47,476 will be entitled to time-and-a-half pay when they work more than 40 hours per week. The rule will significantly impact the salaries of workers, guaranteeing overtime pay for salaried workers earning less. Previously, the threshold was set at only $23,660.
The United States Department of Labor finalized the overtime pay rule that will expand overtime wages to more workers by raising the overtime salary threshold. This means that nearly all workers earning less than $47,476 will be entitled to time-and-a-half pay when they work more than 40 hours per week. The rule will significantly impact the salaries of workers, guaranteeing overtime pay for salaried workers earning less. Previously, the threshold was set at only $23,660.
This shift in minimum salary will bring overtime rights and pay to an estimated 4.2 million workers who are currently exempt. The U.S. Department of Labor unveiled the final version of the rule earlier this month, which raises the minimum salary required to qualify for the Fair Labor Standard Act’s “white collar” exemption to $47,476 per year.
The Labor Department also plans to update the threshold every three years to ensure that it keeps pace with inflation. According to the Department, the overtime rule clarifies the minimum salary and guarantees overtime right to millions of American workers. For many workers, this will mean more money and compensation, for others, it will translate into fewer work hours and more time with their family. Most importantly, the rule gives clarity on the overtime laws so that workers can protect their rights and collect compensation when it has been denied.
I am a manager—can I still collect overtime?
Any worker who earns less than the threshold of $47,476 is entitled to overtime, regardless of title, job duties, or job description. The overtime laws are intended to protect middle-class workers, regardless of their titles. “Managers” must make over this threshold to be exempt from overtime rules.
I have been denied overtime—what should I do?
This new rule goes into effect December 1, 2016. If you have previously been denied overtime and you were entitled, or you are denied overtime after the rule is effective, you should consult with an experienced employment law attorney to protect your rights. In addition to rightful overtime pay, you may be entitled to additional compensation.
Who does the overtime pay rule affect?
The new overtime rule affects both employers and employees nationwide whose incomes fall under the $47,476 threshold. This means that workers from all industries including executives, administrative employees, and other professional workers who earn above the old threshold but below the new one will be entitled to collect time and a half for over 40 hours per week.
What if I am salaried, not an hourly wage earner and make more than the threshold?
You could still be entitled to overtime pay if your job duties do not fall under the “executive” duty exemption. To be exempt from overtime as an “executive,” you must make over the threshold and have the responsibility of supervising two or more employees. If you have “administrative” duties, you must exercise discretion and independent judgment among other requirements. If you think that your job duties are misclassified and that you are entitled to overtime, and experienced attorney can review your case.
Does this mean that I will automatically be collecting overtime?
Employers may take various routes to ensure compliance with the law. Your hours may be reduced, your salary may go up to meet the threshold, or you could incur overtime. Some workers may actually lose hours if employers start hiring part-time or temporary workers to make up the difference. Other employers may convert their workers to hourly employees so that they can track hours worked and ensure compliance or make sure that employees stay under 40 hours in a week.
Protect Your Rights to Overtime in Minnesota
If you have been denied overtime or if you are a salaried worker who has been expected to work more than 40 hours a week, you may be entitled to additional overtime compensation. Wanta Thome Jozwiak & Wanta LLP is dedicated to helping employees of Minnesota protect their rights and pursue all available remedies in the event of wage and hour violations. Please call 612-252-3570 to discuss your case with our St. Paul and Minneapolis employment law attorneys.
Update December 19, 2017: On August 31, 2017, Judge Mazzant of the U.S. District Court for the Eastern District of Texas issued an order invalidating the above-mentioned changes to the overtime pay rules. Meanwhile, the Department of Labor requested public comment concerning new overtime rules. Employers and interested parties had until September 25, 2017, to provide comment. A new overtime rule with more modest increases to the existing salary threshold are expected. We will provide an update once the new rules are released.