New Federal Overtime Rule Announced

The long-awaited changes to federal overtime rule will be unveiled later today at an event in Columbus, Ohio, headlined by Vice President Joe Biden, Labor Secretary Thomas Perez and Ohio Senator Sherrod Brown (D). The most notable change is a nearly doubling of the current salary threshold from its current $23,360 to $47,476 under which virtually all workers will be eligible for time and a half pay. The dramatic change would make nearly five million currently exempt employees nationwide eligible and will go into effect Dec. 1.



Additionally, the DOL considered changing the “duties test” which, based on the type of tasks an employee is responsible for, may make some employees over the threshold eligible for overtime pay as well. It appears that, after significant reaction from the business community, the duties test will stay largely unchanged. Under the new rule, states are still empowered to enact their own statutes that differ from the new federal regulations, however, businesses are subject to whichever requirements are more generous to employees.



Clearly, the significant changes to the salary threshold will force employers to reexamine their labor models, especially with regard to managers and supervisors and the nature of the work they perform. See more information.



Joe Kefauver is managing partner of Align Public Strategies, a full-service public affairs and creative firm that helps corporate brands, governments and nonprofits navigate the outside world and inform their internal decision-making. Align specializes in service sector industries.