Labor Department Poised to Boost Overtime Threshold to $35,000

- Workers who make less than about $35,000 a year will be eligible for overtime pay under a long-awaited proposal the Labor Department is set to unveil soon.

The department is close to proposing a new regulation to update time-and-a-half pay requirements for all hours worked beyond 40 a week. The rule would raise the salary threshold under which workers are automatically entitled to overtime wages from about $24,000 but wouldn’t go to the $47,000 mark pushed by the Obama administration. A federal judge in Texas blocked that proposal before it took effect.

The new rule would significantly expand the number of workers eligible for overtime pay. It may be challenged in court, however, by worker advocates who say it doesn’t go far enough and by business groups worried about new payroll costs.

The Trump administration’s approach to the overtime question has been watched closely by businesses in a wide range of industries. CBS Television Studios recently agreed to pay nearly $10 million to settle a class action for unpaid overtime. Bank of America Corp., Chipotle, and T-Mobile US Inc. are among other companies recently entangled in similar suits.

The DOL also plans to announce that it’s considering ways to periodically increase the salary threshold for overtime eligibility, based on inflation and other factors. The department is opting to tackle that question separately so that any legal disputes don’t stall the overtime regulation.

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