It is no doubt going to be challenged in court, but word on the street is that the Labor Department will soon propose that workers who make less than $35,000 a year will be eligible for overtime pay.

Is Overtime Threshold about to Change?

By Will Temby 

It is no doubt going to be challenged in court, but word on the street is that the Labor Department will soon propose that workers who make less than $35,000 a year will be eligible for overtime pay. 

You might recall the Obama administration tried to make a similar change a few years ago, although the threshold then was $47,000. 

Will Temby

The new rule would significantly expand the number of workers eligible for overtime pay. It may be challenged in court, however, by worker advocates who say it doesn’t go far enough and by business groups worried about new payroll costs. 

The Trump administration’s approach to the overtime question has been watched closely by businesses in a wide range of industries.  

The DOL also plans to announce that it’s considering ways to periodically increase the salary threshold for overtime eligibility, based on inflation and other factors. The department is opting to tackle that question separately so that any legal disputes don’t stall the overtime regulation. 

Regulators want to get the rule finalized before the 2020 election so it will be harder to undo if a Democrat wins the White House. 

The new rule would be the first update to federal overtime pay requirements in 15 years.  

The new salary threshold is on the higher end of what Labor Department observers have been expecting since DOL announced in 2017 that it was working on a new rule.  

Labor Secretary Alexander Acosta was directly involved in drafting the proposal and frequently changed his mind on the threshold figure, according to reports. That figure, which generally ranged from $33,000 to $38,000, wasn’t finalized until recently. 

Small businesses and employers in areas where the cost of living is lower have complained that boosting overtime requirements will force them to cut jobs to meet payroll costs.