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March 11, 2019

Trump Administration Issues Proposed Overtime Rule

On March 7, the U.S. Department of Labor released the Trump administration’s proposed overtime rule, which would increase the minimum salary for overtime exemption to $35,308 per year, or, from the currently weekly level of $455 to $679 per week. The proposal does not include automatic increases for the future, but commits to periodic review and update of the threshold. It also permits employers to use nondiscretionary bonuses and incentive pay to satisfy up to 10 percent of the salary level. The rule would affect exemptions for executive, administrative, professional, outside sales and computer employees, but would not affect non-management employees, including non-management production-line employees.

Once formally published – something that should happen over the next few days – the public will have 60 days to comment on the proposal.

Click here for the DOL’s fact sheet on the proposed rule and here for a list of frequently asked questions that aims to answer potential questions about the proposal.

As Politico explained, the proposal already is the subject of a federal lawsuit. In November 2016, a Texas federal judge enjoined a previous version of the rule that was written by the Obama administration. Under the Trump administration, the Department of Labor appealed that ruling and the Fifth Circuit Court of Appeals suspended the lawsuit giving the agency time to consider revisions. As Politico explains, “After a period of public comment DOL will issue the rule in final form and the appeal can resume.”