Updating the overtime threshold under the Fair Labor Standards Act (FLSA) for the white collar exemptions from overtime has taken many twists and turns. It appears we are nearing the end of the journey as the Department of Labor (DOL) plans to send its proposed update to the overtime rule to the White House Office of Management and Budget (OMB) today for final review.
Over the last several years, we have kept you updated on the latest in the saga to update the overtime threshold. As you may recall, under the Obama Administration, a proposal to raise the threshold to $47,476 annually ($913 per week) was introduced. That proposal would have gone into effect on December 1, 2016. It was ultimately struck down. Instead, the DOL, under former Labor Secretary Alexander Acosta, sought public comment on a change to the overtime rule, which resulted in the proposal sent to OMB today.
As proposed, the rule would increase the salary threshold for the white collar exemptions to $35,308 annually ($679 per week). In order to be exempt from the FLSA’s overtime and minimum wage provisions, employees would need to be paid at least this threshold amount on a salary basis and meet certain duties tests. If not paid at least the threshold amount or if none of the duties test are met, employees would not be exempt and would need to be paid for any and all overtime hours worked.
Need help? Nevada Association of Employers provides a helpful checklist to assist members with making the determination whether an employee is exempt from the minimum wage and overtime requirements of the FLSA or not.
In addition to the salary threshold for the white collar exemptions, the salary threshold for highly compensated employees was also raised. The new proposal would classify someone as a “highly compensated employee” if they made at least $147,414 annually. Currently, the threshold is $100,000.
The proposed rule does not provide for automatic adjustments to the salary threshold, create different salary levels based on region, or make any changes to the duties tests.
If finalized, this increase would be the first since 2004 when the current threshold of $23,660 was adopted.
Nevada Association of Employers (NAE) will continue to monitor this issue and provide any updates as they come in. Nevada businesses trust that they are getting the latest information on their rights and obligations as employers from NAE because it’s what we do. For more information about NAE and what we do for Nevada employers, visit our website. If you are a Nevada employer interested in membership, please contact membership@nevadaemployers.org or join today!
