The Wait Is Over for New Federal Overtime Rule

COLUMBUS, Ohio — The long-awaited changes to the federal overtime rule will be unveiled Wednesday at an event in Columbus, headlined by Vice President Joe Biden, Labor Secretary Thomas Perez and Democratic Ohio Senator Sherrod Brown.

The most notable change announced will be 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. This dramatic change would make nearly five million currently exempt employees eligible nationwide and will go into effect on Dec. 1.

The Department of Labor additionally 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 in the new rule.

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.

Although a long shot, numerous pro-business and free-market groups in Washington, D.C., sent a letter to members of Congress on Tuesday urging lawmakers to use whatever means necessary to prevent enactment of the new regulation.

While this will not stop the rule from going into effect, it likely means that revising the new regulations will be a top legislative priority for the business community going forward.