Labor Department raises overtime threshold for salaried workers

A decision from the U.S. Department of Labor has made it possible for 1.3 million more salaried workers to collect overtime pay. The federal government has lifted the salary threshold for mandatory overtime pay to $35,568. In 2016, the Obama administration had set the threshold at roughly $47,000, but a federal court judge in Texas had deemed the threshold too high and therefore likely to include too many salaried managers.

The previous overtime threshold had only applied to workers earning annual salaries under $23,660. The government had established that amount in 2004. Once the new threshold goes into effect on Jan. 1, 2020, salaried workers making up to $35,568 will have a right to receive 1.5 times their normal pay for hours worked beyond 40 hours in a week. Some salaried workers who earn above the threshold might potentially have a right to overtime pay as well if their duties are not primarily related to management.

Business associations monitor changes to overtime rules, and many of them had protested the higher threshold sought by the Obama administration. Employers often face lawsuits from employees trying to collect their lawful overtime pay. Depending on company size, the settlements for class-action lawsuits sometimes reach into the millions of dollars. The business community believes that higher overtime thresholds inspire more lawsuits.

An employer might tell a worker that overtime rules do not apply to that person's position. A person who suspects that an employer has violated wage and hour laws could consult an attorney about labor regulations. An attorney might determine whether an employer has misapplied overtime rules or misclassified an employee as exempt. If violations have occurred, then an attorney may assist with collecting payroll records and initiate litigation to pursue unpaid overtime.

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