The U.S. Department of Labor (DOL) has published its long-awaited proposed rule on overtime pay. Under the proposed rule, the annual salary threshold would increase from $23,660 to $35,308 for white-collar employees who are exempt from receiving overtime pay. For highly compensated employees, the exemption would increase from $100,000 to $147,414. If adopted, the mobility industry would be more impacted by the increase in exemption for highly compensated employees but less by the standard white-collar exemption, as a small portion of transferees earn less than the proposed new threshold of $35,308.
On March 13, 2014, then-President Obama signed a Presidential Memorandum that directed the DOL to revise the rules governing the exemption for white-collar workers from overtime pay. On November 22, 2016, a federal judge in Texas issued an injunction blocking the U.S. Department of Labor (DOL) from implementing the overtime pay rule. The DOL, as part of the then-Obama Administration, appealed the ruling to the 5th Circuit Court of Appeals.
On February 22, the DOL under the Trump Administration filed for a 60-day extension in which to file its brief in the case stating the Secretary of the Department was still waiting Senate Confirmation. The Court granted the request and the DOL had until June 30 to submit its brief. The case is still on appeal, but the DOL has pushed forward with the proposed rule in which stakeholders have 60 days to comment. The final rule is expected to be published by early next year.
Under the Fair Standards Labor Act (FSLA), employers are required to pay a minimum wage as well as overtime pay for over 40 hours worked in a week. However, the FSLA allows for exemptions to paying overtime to most executive, administrative, professional and other white-collar employees whose salary is over a specified amount. The proposed rule would increase these thresholds.
Please note that the Fair Standards Labor Act applies only to employees working in the U.S. and not to U.S. citizens working in foreign countries. To access the Office of Personnel Management FLSA: Foreign Exemption Fact Sheet, please go to: https://www.opm.gov/policy-data-oversight/pay-leave/claim-decisions/fair-labor-standards-act/foreignexemption.pdf. For foreign nationals working in the U.S., there may be other factors that need to be considered related to overtime pay.
This blog is not to be taken as labor or immigration law advice or counsel. For information on how changes in minimum salary levels could impact your organization, please contact your appropriate legal counsel.