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“Long-awaited” announcement on U.S. workers’ overtime pay

On Behalf of | Oct 8, 2019 | Business Formation & Planning |

Back and forth. Serve, return and serve again.

That swinging-pendulum aspect concerning notable federal regulatory action might be what strikes most close followers as centrally relevant concerning it.

“It” is this: law governing overtime pay for workers in Connecticut and nationally who collect a salary rather than an hourly wage.

That latter demographic has long been eligible for overtime pay, with regulations that are straightforward and generally not too problematic.

Conversely, things have been more controversial and in flux regarding the parameters surrounding overtime pay for salaried workers. For about 15 years now, American employees in that category have been entitled under federal law to receive overtime compensation only if their annual pay is less than $23,600.

That amount was determined back in 2004. Its rationale was that workers commanding pay above that threshold might reasonably be performing management duties and should be deemed exempt from overtime pay protections.

A broad band of critics has long lamented that the stated threshold amount is far too low. In fact, the Obama administration sought to raise it to about $47,000 in 2016, an effort that was subsequently shot down by a federal judge.

The above-cited service return occurred last month, when the U.S. Department of Labor formally presented a new threshold amount. The DOL now mandates that salaried workers making up to $35,568 yearly will be eligible to receive overtime pay for work exceeding 40 hours per week. The change is slated to take effect from January 1 of next year.

Supporters say it is long overdue and that the amount, while much higher than that currently stipulated under federal law, should have been hiked even higher.

Critics, conversely, cite multiple concerns with the revision. Some business groups note that the liberalized threshold could force them to cut back hours for select workers or even eliminate some positions.

We will keep a close eye on the legislation going forward.