Trump Administration Issues Final Overtime Rule

- Employers Must Act in Less than Three Months

The Trump Administration late last month formally rescinded the Obama Administration’s 2016 Final Rule regarding overtime payments to “white collar” employees under the federal Fair Labor Standards Act. Employers have less than three months to ensure their workforces are properly classified in accordance with the final rule.

Under Trump, the Department of Labor (DOL) increased the current minimum salary level by almost 50 percent and the current exemption salary level for highly compensated employees by less than eight percent.

The attorneys at TAB’s federal legal counsel, Pillsbury Winthrop Shaw Pittman, offer guidance on what employers need to do, but here are the key takeaways:

1. DOL’s final rule raises the minimum salary for “white-collar” exemptions from $23,660 to $35,568 annually as of Jan. 1, 2020, similar to the level proposed in March 2019.
2. The agency, however, adopted a much smaller jump to the minimum annual compensation for the highly compensated exception, increasing it only from $100,000 to $107,432, instead of to the previously proposed $147,414.
3. An estimated 1.3 million exempt employees will become non-exempt under the new levels.

PWSP LEGAL ADVISORY ON NEW OVERTIME RULES

Questions? Contact TAB’s Oscar Rodriguez or call (512) 322-9944.