U.S. Labor Department Moves to Introduce a New Overtime Threshold
U.S. Labor Department Moves to Introduce a New Overtime Threshold

Current wage data and projections of purchasing power could translate to a higher baseline income to legally qualify for overtime pay.

The U.S. Labor Department has announced plans to update overtime thresholds for hourly employees, “raising the minimum salary for employees to qualify for Fair Labor Standards Act white-collar exemptions to $35,308 per year,” according to an article in Restaurant Hospitality.

Under current law, employees whose annual salary comes to less than $23,660 annually, or who earn $455 a week or less, are eligible for “overtime based on their job duties,” the article said.

“The Labor Department’s new proposal would update the salary threshold using current wage data, projected to Jan. 1, 2020, and boost the standard salary level to $679 a week (or $35,308 per year). The department said the plan “would make more than a million more American workers eligible for overtime,” the article said.

This could significantly affect franchisors across segments, as many employees at franchise locations work on an hourly income.

According to the article, Matt Haller, the IFA’s senior Vice President of Government Relations and Public Policy, said in a statement, “The IFA commends the Department of Labor for issuing a sensible approach to expand overtime eligibility.”

Read the full article here.