DOL Poised to Increase Overtime Threshold to $35,000
A new proposal from the U.S. Department of Labor could be unveiled soon that would allow salaried restaurant employees making less than $35,000 annually to become eligible for overtime pay, according to Bloomberg Law.
Currently employees are entitled to overtime wages at $24,000 and would raise the trigger point threshold $11,000 to $35,000. The new proposal could affect any salaried employee—from managers and kitchen personnel to corporate employees—who surpass 40 hours a week. The boost isn’t as high as the proposed $47,476 trigger point under the Obama administration, which was blocked by a federal judge in Texas in August 2017 before it came into effect. The roll out of that proposal has been frequently delayed since its proposed July 2017 release date.
While the Trump administration has addressed the need to change the threshold, which haven’t changed in 15 years, it seems like it will do so more conservatively than what the former Democratic administration’s proposed threshold. Some are questioning whether or not the current administration has studied the implications of dropping the threshold. While others—like small business owners and people in the restaurant industry—are concerned the new threshold will be too costly for them and could result in the elimination of jobs.
Many restaurant owners support the goals of the change, but it’s clear the rules will mean changes for all restaurateurs. Not only will salaried employees be affected by the new trigger point, the new changes will trickle down throughout the entire restaurant. If the new proposal passes through the required process of regulatory changes and is approved by the DOL, restaurants will need to make some adjustments so jobs can stay secure and employees can be compensated properly.
Under the new proposed threshold, salaried employees earning less than $35,000 would be entitled to time-and-a-half for work exceeding 40 hours a week.
The new proposal was sent to the White House Office of Management and Budget on January 16 giving the current administration enough time to solidify the new threshold before the upcoming 2020 election.
Along with the new threshold, the DOL is also expected to announce plans for periodic increases for the overtime threshold, based on inflation and other factors, according to Bloomberg Law.