Paul DeCamp, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s Washington, DC, office, was quoted in Forbes, in “More Than 4 Million More Workers Will Start Getting Paid Overtime Under Controversial New Rule,” by James Farrell.
Following is an excerpt:
More than 4 million additional salaried workers will be required to receive overtime pay after the Department of Labor announced new eligibility rules Tuesday—a change that was met with cheers from labor groups but has already raised the specter of legal challenges from critics.
Key Facts
Under current law, salaried workers making more than $35,568 annually are exempt from mandated overtime pay unless their jobs don’t include “executive, administrative, or professional” duties—but the Department of Labor’s long-expected final rule will increase that salary threshold to nearly $43,888 on July 1, and then again to $58,656 on Jan. 1.
The new rule will also increase the threshold for an exemption for so-called highly compensated employees—generally automatically considered exempt from mandatory overtime requirements regardless of job duties—from $107,532 to $151,164.
The expanded thresholds would make an estimated 4.3 million more salaried employees eligible for mandatory overtime by Jan. 1, and the rule would be reevaluated every three years, according to the Department of Labor.
Acting Labor Secretary Julie Su said current law left lower-paid salaried employees from getting overtime for additional work, even when they “are doing the same job as their hourly counterparts,” which she called “unacceptable.”
Democratic and labor groups praised the rule change Tuesday, with the left-leaning Center for American Progress calling it “the latest action” in the Biden administration’s efforts “to ensure that people are paid fairly for hard work.”
But the new rule increases the threshold to an even higher amount than what was proposed in an Obama-era attempt at overtime expansion that was blocked in court.
Chief Critics
Several business organizations raised concerns Tuesday, with the National Retail Federation claiming the change could cause employers to “reexamine compensation packages for workers nationwide” and potentially cut back job perks, like flexibility or remote working. The group said it believed the rule “exceeds the Department’s legal authority.” The National Restaurant Association argued it would “exponentially increase operating costs for small business restaurant owners.” Last August, Bloomberg Law reported several employer-friendly attorneys believe the new law could be vulnerable to legal challenges, with Paul DeCamp of Epstein Becker & Green claiming the then-rumored threshold was “basically daring the business community to sue.”
People
Member of the Firm
