DOL Overtime Proposals—Part II: Salary Change Consequences and “Discretionary” Bonus Clarification

Double-Barreled Rulemaking. Last month, we commented on the Department of Labor’s (DOL) March 7, 2019, proposed rulemaking to increase the salary test threshold for overtime exemptions, potentially making another million or so people eligible for overtime pay. Next, in a companion rulemaking proposal, issued March 28, 2019, and summarized in our post last week, the DOL announced that it seeks to clarify how the “regular rate” is calculated for the purpose of calculating overtime. Now What? Whether and when the new salary change will take effect is unknown—but it could be later this year, barring litigation delays such as we saw with the Obama administration’s attempt to effect similar changes. Applying the same calendar math, the regular rate changes could take effect later this year or in early 2020. Either way, it would be worthwhile for HR professionals to think ahead. Salary Changes The Choice. Many employers already adjusted in…

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