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Department of Labor Announces Much Anticipated Proposal on Overtime Pay

In early March, the Department of Labor (DOL) released a proposal that would make it possible for more workers to collect overtime pay. According to the proposal, employees who earn an annual salary of $35,000 would be able to collect time-and-a-half for the number of hours they worked beyond the 40-hour work week.

Currently, employees who make $24,000 per year are eligible for overtime, so this proposal would expand the number of employees who could collect overtime pay.

Threshold Adjustments

This latest proposal is an increase from the current threshold, which entitles employees who make an annual salary of $24,000 to collect overtime. However, it is not as high as the proposal made by the Obama administration, which would have allowed workers making $47,000 per year to collect overtime once they surpassed 40 hours in a week.

The DOL’s latest proposal would allow more workers to collect time-and-a-half for their overtime work. The proposal made by the Obama administration also included periodic increases of the salary threshold, which this latest proposal does not have. Rather, the DOL is looking for comments from the public about whether they should update the overtime requirements every four years.

The Obama administration threshold was blocked by a judge in 2017 and is still subject to an ongoing appeals process. The judge had made this decision saying that the DOL was focused too heavily on the amount of money workers make, rather than their jobs.

Potential Legal Challenges

The last time the salary threshold was increased was in 2004. While the DOL hopes to avoid litigation by using the same economic methodology that was used by the George W. Bush administration in 2004, this latest proposal is likely to face legal challenges. Businesses will likely voice their concerns over the impact the proposal will have on their ability to meet rising payroll costs. Worker advocates will argue that the proposal falls short when it comes to expanding overtime pay.

Other legal issues may arise in response to the DOL’s decision against varying the salary threshold based on cost of living differences in different regions across the country. Large businesses and worker groups, in particular, oppose this decision.

Other critics of the proposal say that fewer employees are eligible for time-and-a-half pay due to the delay in modifying the requirements for overtime pay. According to an Economic Policy Institute Senior Economist, millions of workers who should have received overtime protections under the 2016 rule will not be covered by this new rule.

In addition, many believe that the standards are outdated and do not reflect the realities of the 2019 workplace. However, a DOL official said that the general overtime methodology has been proven to work, and the DOL is confident that it is appropriate for the purpose of updating the salary threshold.

Philadelphia Wage and Hour Lawyers at Sidkoff, Pincus & Green P.C. Secure Overtime Pay for Eligible Workers

If you have been denied overtime wages, the Philadelphia wage and hour lawyers at Sidkoff, Pincus & Green P.C. will work to secure the full compensation you deserve. To schedule a confidential consultation, call us today at 215-574-0600 or contact us online. We will continue to fight for you until we have your complete satisfaction. Our offices are conveniently located in Philadelphia, where we serve clients throughout South Jersey, Pennsylvania and New Jersey.