DOL Proposes New Overtime Threshold for Salaried Employees

The U.S. Department of Labor (DOL) is proposing a new threshold for overtime pay (1.5 normal earnings) for salaried employees earning up to $55,068. The current overtime threshold of $35,568 per year has been in place since 2020, making this a 55% increase ($19,500) to the federal salary threshold.
 
Salaried employees earning up to $55,068 per year will get overtime pay (1.5X normal earnings) when working over 40 hours a week, according to a new federal proposal. The current overtime threshold of $35,568 per year has been in place since 2020, making this a 55% increase ($19,500) to the federal salary threshold.
 
Total cost: The U.S. Labor Department (DOL) estimates this will result in a “Year 1 income transfer” of $1.2 billion from employers to employees.
 
How we got here: DOL sets a salary threshold to ensure eligible employees receiver overtime pay for all hours worked over 40 in a workweek. Using 2022 data, the newly proposed salary amount equals $1,059 per week, or $55,068 annually for a full-year worker.
 
Leading Congressional Democrats have long supported federal overtime increases, as the Restoring Overtime Pay Act of 2023 proposes to raise the threshold to $75,000 per year by 2026.
 
Red flag: The DOL’s proposed rule also seeks an automatic “update” of the salary threshold every three years.
 
In the weeds: The DOL did not change the “standard duties test” to classify exempted administrative and executive positions.
 
Next steps: The NRA will collect feedback and plans to submit comments by the November 7 deadline. The DOL will also host briefings on the proposal in coming weeks.

• FAQ on the Overtime Proposal (DOL, 9 pages)
• The Proposed Rule on Overtime (DOL, 267 pages)

 
LRA members are encouraged to review Overtime Proposal FAQs and provide comments on the impact it will have on your restaurant or hospitality business. 

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