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New white-collar OT rules inch closer to release

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in Human Resources,Overtime Labor Laws

The long-awaited rewrite of federal rules governing overtime pay for salaried executive, administrative and professional employees took one step closer to becoming reality on May 5, when the U.S. Department of Labor forwarded a proposed final version to the Office of Management and Budget (OMB), which assesses the fiscal impact of government initiatives.

OMB’s review is one of the last hurdles federal regulations must clear before they are considered ready for public comment and eventual enactment. The process usually takes between 30 and 60 days, making it theoretically possible for the DOL to meet its self-imposed deadline to release the rules “this spring.”

The rulemaking process so far has taken more than a year.

In March 2014, President Obama ordered the DOL to “update and modernize” the Fair Labor Standards Act’s (FLSA) executive, administrative and professional exemptions to make more managers eligible for overtime pay.

Currently, executive, administrative and professional employees are exempt from the FLSA’s overtime pay requirements if they earn more than $455 per week, or $23,660 per year. It’s likely that the proposed rule will raise that threshold—possibly to more than $50,000 per year. As many as 3.1 million more white-collar workers would suddenly start collecting overtime if they work more than 40 hours in a workweek.

Assuming OMB signs off on the new rules, a public comment period will follow, and they could become official by late summer.

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