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Proposed Overtime Rule Changes

2019 Proposed Rule

In May of 2019, the U.S. Department of Labor (DOL) concluded a comment period on U.S. Department of Labor regulations that adjust the minimum salary level that exempts executive, administrative, and professional employees from overtime pay.

The regulations propose raising it to $679 per week ($35,308 per year) from the current level of $455 per week ($23,660 per year), which was set 15 years ago.

Colorado Nonprofit Association submitted comments expressing support for the change and requesting updates to DOL guidance for nonprofits.

Our comments

2017 Request for Information

With the change of administration, the U.S. Department of Labor (DOL) revisited the rule in 2017 and issued a request from information from the public. 

2017 Request for Infomation

Final 2016 Rule

The DOL released its Final Rule on overtime pay regulations for employees covered by the Fair Labor Standards Act (FLSA). Implementation of the 2016 overtime rule did not take effect due to a Nov. 26, 2016 injunction by a federal district court.

Effective December 1, 2016, the rule would have changed the salary level but not the duties test for exempt employees as follows:

  1. Setting the minimum salary level for exempt full-time workers at $913 per week or $47,476 per year (40th percentile of full-time salaried workers). 
  2. Setting the total annual compensation requirement for highly compensated employees (HCE) at $134,004 (90th percentile of full time salaried workers).
  3. Automatically updating salary and compensation levels every three years to maintain wages at these percentiles.

Nationally, 8 percent of employees would have been automatically eligible for overtime pay based on their salary amounts (4 million workers nationwide including 73,000 in Colorado).

Background 

FLSA coverage applies to employees who work for certain "enterprises" (businesses or organizations) or who regularly engage in interstate commerce.

Is my organization covered under the FLSA?

For an employee to be exempt from overtime pay, DOL regulations have required three tests to be met:

1. The employee must be paid a predetermined and fixed salary that is not reduced based on changes in the quality or quantity of work performed.

2.  The amount of salary paid must meet a minimum specified amount (Presently, $455 per week/$23,660 for a full year).

3. The employee's job duties must primarily involve executive, administrative, or professional duties as defined by the regulations

Additional resources on final rule and coverage