Monday, May 20, 2024

DOL will increase time beyond regulation wage threshold to $44K in July, $59K subsequent 12 months

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Dive Temporary:

  • The U.S. Division of Labor mentioned Tuesday it can publish a remaining rule elevating the Honest Labor Requirements Act’s minimal annual wage threshold for time beyond regulation pay eligibility in a two-step course of. Beginning July 1, the edge will improve from $35,568 to $43,888 per 12 months. It’s going to then improve to $58,656 on Jan. 1, 2025.
  • The modifications will develop time beyond regulation pay eligibility to tens of millions of U.S. employees, the company mentioned. DOL’s 2025 threshold represents a soar of about 65% from the Trump administration’s 2019 rule and is barely larger than the $55,068 mark that DOL proposed in 2023.
  • The edge will routinely replace each three years utilizing present wage knowledge — which might subsequent happen on July 1, 2027 —  however DOL mentioned within the proposed rule that updates could also be quickly delayed if the division chooses to interact in rulemaking to alter its methodology or replace mechanism.

Dive Perception:

The rule represents one more regulatory replace for employers, following DOL’s impartial contractor remaining rule and the U.S. Equal Employment Alternative Fee’s being pregnant lodging rule. The time beyond regulation rule cleared White Home overview weeks in the past, although, and one supply advised HR Dive on the time that its publication was anticipated at any second.

The FLSA’s time beyond regulation exemption applies to employees employed as bona fide govt, administrative, skilled and out of doors gross sales workers, in addition to some laptop workers.

The primary a part of the rise scheduled for July 1 follows the method for wage-threshold will increase established within the 2019 rule, Jessica Looman, administrator of DOL’s Wage and Hour Division, mentioned throughout a press name Tuesday. This technique relies on the twentieth percentile of weekly earnings of full-time salaried employees within the lowest-wage U.S. Census area, whereas the January 2025 improve makes use of an up to date methodology that’s primarily based on the thirty fifth percentile.

The primary improve in July 2024 is anticipated to have an effect on roughly 1 million employees, Looman mentioned, whereas the second improve in January 2025 is anticipated to have an effect on roughly 3 million employees.

A separate time beyond regulation exemption applies to sure extremely compensated workers. For these workers, DOL’s rule will improve the minimal wage threshold to $132,964 on July 1, and to $151,164 on Jan. 1, 2025, Patrick Oakford, deputy assistant secretary for coverage at DOL, mentioned through the press name.

In all, the division mentioned it thought of greater than 33,000 public feedback on the proposed rule. A kind of got here from the Society for Human Useful resource Administration, which requested the company to delay the ultimate rule’s efficient date to 2025. SHRM mentioned {that a} 60-day interval between publication and efficient date is inadequate for employers to evaluate and adjust to the rule.

“This rule will restore the promise to employees that in the event you work greater than 40 hours in per week, you have to be paid extra for that point,” Performing Secretary of Labor Julie Su mentioned in a press launch. “Too usually, lower-paid salaried employees are doing the identical job as their hourly counterparts however are spending extra time away from their households for no extra pay. That’s unacceptable.”

Observers now flip to the federal courts, the place challenges to the rule are anticipated. In September, a choose for the U.S. District Court docket for the Western District of Texas rejected one try to strike down the 2019 rule wherein an employer claimed that DOL lacked the statutory authority to concern it.

The authorized battle additionally might carry over to Congress, the place a Republican consultant from Missouri has launched a invoice that might block the brand new remaining rule. The invoice has not but acquired a committee vote.

Within the meantime, employer-side attorneys who beforehand spoke to HR Dive mentioned employers can decide which positions could be affected by the up to date threshold, and whether or not to transform affected workers to hourly, nonexempt standing and pay time beyond regulation, or increase pay to place them over the edge.

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