The U.S. Department of Labor is trying, once again, trying to raise the overtime salary threshold for exempt defined employees to $35,308 per year, up from the current $23,660 which has been in place since 2004.
This proposed rule would also raise the threshold for “highly-compensated employees” from $100,000 annually to $147,414 per year.
All of this would take effect January 1, 2020 after a public comment period that’s already underway. (At the time of this posting, more than 1,100 comments had already been received.)
Of course, some states already have thresholds exceeding the federal requirement. They include:
- Alaska: The white-collar overtime salary threshold is $41,142.40.
- California: The threshold is $49,920 for companies with 26+ employees. Smaller employers face a threshold of $45,760. There are higher thresholds for computer-software employees ($94,603.25 per year) and physicians and surgeons if they earn at least $82.72 per hour.
- New York: In NYC, 11+ employee groups face a salary threshold of $58,500 while 10 or fewer have the line at $52,650.
In Nassau, Suffolk, and Westchester Counties the amount is $46,800. The threshold for the rest of NY is
$43,264. - Pennsylvania: The current white-collar salary threshold is below the federal line, but Governor Tom Wolf is planning to raise it to $31,720 January 1, 2020, to $39,832 January 1, 2021, and then to $47,892 in 2022. (This means Pennsylvania employers would follow the new federal rule in 2020 and then switch to state rule in 2021.)
In 2016, the Obama Administration tried to raise the overtime threshold to $47,476. That rule was stopped in the Fifth Circuit of the U.S. Court of Appeals.
The new proposed rule was announced March 7, 2019 and is subject to a 60-day public comment period.
If the changes do take effect January 1, 2020 rest assured, Focus HR, Inc. clients will receive personal guidance and compliance support.
To comment on the proposed increase click here.
