Labor Dept Proposes Vast Expansion of Overtime Eligibility The New York Times

By Gustavo Brito in Bookkeeping on 27 de abril de 2023

The Labor Department has proposed raising the threshold to $55,068, or $1,059 weekly. So, if an employee’s salary is above $35,568 per year (or $684 per week) and their job duties qualify for an overtime exemption, then you could classify that employee as exempt—and they wouldn’t be entitled to overtime pay. But if they don’t meet both criteria, they’d qualify as nonexempt and be eligible for overtime pay. The regular rate includes all remuneration for employment except certain payments excluded by the Act itself.

It doesn’t matter if that marketing manager works 34 hours one week, 42 hours the next, 38 hours the following week, and 55 hours the final week of the month/pay period. Because they’re exempt, salaried employees, you would pay them their $1000/week salary for all four pay periods, regardless of the number of hours worked—and no overtime pay is required. For covered, nonexempt employees, the Fair Labor Standards Act (FLSA) requires overtime pay (PDF) to be at least one and one-half times an employee’s regular rate of pay after 40 hours of work in a workweek. Some exceptions apply under special circumstances to police and firefighters and to employees of hospitals and nursing homes. These standards apply to full-time and part-time workers in the private sector and in federal, state, and local governments.

Alternative Overtime Thresholds

The second method is used when an employee receives a salary that covers all worked hours. Millions of salaried workers would be newly eligible for overtime pay under a proposal unveiled by the Biden administration Wednesday, but the draft rule is likely to face pushback from business groups that blocked a similar effort under former President Obama. Most employees have the right to be paid at least the federal minimum wage ($7.25) for all hours worked regardless of whether you are paid by the hour, the day, or at a piece rate. Some state laws and local laws provide greater employee protections; employees are entitled to the highest of the local, state, or federal minimum wage that applies to them. However, it’s important to remember that exempt salaried employees are paid the same amount regardless of how much they work—and, as an employer, you don’t want to abuse that.

So, if your employee is both salaried and classified as exempt, they are not entitled to overtime pay. But there are situations where salaried employees would be eligible for overtime pay—and as an employer, it’s important to understand the relevant overtime rules and when you need to be paying for overtime hours. Unless specifically exempted, employees covered by the Act must wage earners are eligible for overtime after 40 hours per week worked. receive overtime pay for hours worked in excess of 40 in a workweek at a rate not less than time and one-half their regular rates of pay. The Act does not require overtime pay for work on Saturdays, Sundays, holidays, or regular days of rest, as such. Overtime pay calculations can differ based on an employee’s pay structure, such as hourly, salaried, or commission-based.

Overtime Fact Sheets

Mark asked his manager about this, and the manager dismissed his concern, saying the company didn’t pay overtime. Advocates of a higher cutoff argue that one key benefit would be to prevent employers from misclassifying workers as managers to avoid paying them overtime. Under the Biden administration’s proposal, the overtime limit would automatically adjust every three years to keep pace with rising earnings. The Labor Department will accept public comments for 60 days before issuing a final version of the rule.

Moreover, the Department of Labor and the
courts may award “liquidated damages”  of two-times
the amount of wages due. To avoid significant financial
forfeiture, businesses should carefully analyze existing job
descriptions to ensure they accurately reflect the position’s
duties and responsibilities and will justify the classification of
an employee as exempt from overtime. Unless specifically exempt, you have the right under federal law to receive overtime pay, or not less than 1.5 times your regular rate of pay, after 40 hours of work in a seven-day workweek.

Overtime Laws and Regulations

While the 40-hour workweek is the standard threshold for determining when overtime pay begins, some states have additional regulations that can affect overtime calculations. For instance, in certain states, daily overtime pay may be mandated if an employee exceeds eight hours within a 24-hour period. The first method is used when an employee receives a salary that covers a fixed number of worked hours.

Another member was recently disciplined for refusing to work through his scheduled days off on short notice so he could care for a family member having health issues, Ballew said. Workers say they feel like they are caught in a perpetual cycle where the required overtime is causing people to leave their jobs, exacerbating the staffing shortages and requiring even more overtime. The Virginia Beach Fire Department said in a statement that fire departments nationwide have been seeing a lack of interest in the profession for various reasons, including health risks, the long hours required, and a relatively low salary compared to other jobs. Employers say requiring overtime is a necessity — especially in health and safety positions with minimum staffing requirements — because they are unable to find enough workers to staff the shifts. This Halloween, eight Boston EMTs were mandated to work the overnight shift at the last minute, some of whom were parents who had planned to take their kids trick-or-treating that evening, said Mutter.

With any questions regarding the proper classification of your
employees for overtime purposes. The contents of this document do not have the force and effect of law and are not meant to bind the public in any way. This document is intended only to provide clarity to the public regarding existing requirements under the law or agency policies. “When Is Overtime Due?”
Information about overtime from the elaws FLSA Advisor. But research has shown that many companies illegally deny workers overtime by raising their salaries just above the overtime cutoff and simply labeling them managers, even if they do little managerial work. A federal judge struck down that proposal before it could take effect after business groups and 21 states sued to stop it, agreeing with them that the Labor Department exceeded its authority and set the threshold too high.

• In conclusion, while most jobs require overtime pay after 40 hours per week, exemptions and state-specific laws can affect eligibility and calculations.
• You expect that employee to work 36 hours a week; however, this week they worked 50 hours.
• If you expect the employee to work 40 hours a week, you can skip this step since the regular wages will be the same as the weekly salary.
• Employees covered by the Fair Labor Standards Act (FLSA) must receive overtime pay for hours worked over 40 in a workweek, at a rate not less than one and one-half their regular rates of pay.
• Understanding these exemptions and exceptions is vital in complying with overtime pay regulations and avoiding any potential legal issues.

These variations necessitate both employers and employees to understand their local regulations and how they may impact their overtime pay calculations. An employee’s workweek is a fixed and regularly recurring period of 168 hours — seven consecutive 24-hour periods. Currently, eligible employees are eligible for overtime pay if they earn less than $35,308 a year.

Overtime wages for a salary with fixed hours

The Biden administration calls for automatically raising the overtime threshold every three years, to keep pace with rising wages. In the waning days of the Obama administration, the Labor Department ordered a similar increase, boosting the threshold from $23,660 to $47,476. The Trump administration then crafted its own rule, using the $35,000 threshold that’s in place today.