NAICU Washington Update

Final Overtime Rule Increases Salary Threshold to $35,568

September 26, 2019

The U.S. Department of Labor (DOL) issued its final rule for overtime pay requirements under the Fair Labor Standards Act increasing the annual salary threshold for white collar exempt employees to $35,568 (from $23,660). Employers, including colleges and universities, will have to be in compliance by January 1, 2020.
The final threshold is slightly higher than what DOL proposed earlier this year, and significantly less than the $47,476 amount proposed during the Obama Administration.  The rule formally rescinds the Obama Administration’s 2016 rule in its entirety.
DOL received over 116,000 comments, including those drafted by the College and University Professional Association for Human Resources and signed on to by NAICU, during the comment period.  The final rule includes decisions on many of the suggestions from the comments.  It rejects a private college request to allow private institutions to offer comp-time arrangements to employees, like public colleges and other public employers are able to do.  It also rejects a suggestion from private colleges, and private Christian colleges in particular, to allow multiple salary levels taking into consideration regional pay differences.
The new rule makes no changes to the duties test for exempt employees.  Also, in addition to increasing the salary threshold, the final rule raises the total annual compensation level for highly compensated employees to $107,432 (from $100,000). In recognition of changing pay practices, this annual raise will allow employers to use nondiscretionary bonuses and incentive payments to satisfy up to 10 percent of the standard salary level. The rule indicates that measures will be taken by DOL to update and adjust the salary threshold going forward, but does not include details on how that will be administered. 

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