DOL Proposes New Overtime Threshold for Salaried Employees
Comment period is underway through November 7

Dear NvRA Members,
​
The U.S. Department of Labor (DOL) is proposing a new threshold for overtime pay (1.5 normal earnings) for salaried employees earning up to $55,068. The current overtime threshold of $35,568 per year has been in place since 2020, making this a 55% increase ($19,500) to the federal salary threshold.
 
Salaried employees earning up to $55,068 per year will get overtime pay (1.5X normal earnings) when working over 40 hours a week, according to a new federal proposal. The current overtime threshold of $35,568 per year has been in place since 2020, making this a 55% increase ($19,500) to the federal salary threshold.
 
Total cost: The U.S. Labor Department (DOL) estimates this will result in a “Year 1 income transfer” of $1.2 billion from employers to employees.
 
How we got here: DOL sets a salary threshold to ensure eligible employees receiver overtime pay for all hours worked over 40 in a workweek. Using 2022 data, the newly proposed salary amount equals $1,059 per week, or $55,068 annually for a full-year worker.
 
Some Congressional support- have long supported federal overtime increases, as the Restoring Overtime Pay Act of 2023 proposes to raise the threshold to $75,000 per year by 2026.
 
Red flag: The DOL’s proposed rule also seeks an automatic “update” of the salary threshold every three years.
 
Concern: The DOL did not change the “standard duties test” to classify exempted administrative and executive positions.
 
Next steps: The National Restaurant Association will collect feedback and plans to submit comments by the November 7 deadline. The DOL will also host briefings on the proposal in coming weeks. FAQ on the Overtime Proposal (DOL, 9 pages)

Members are encouraged to review Overtime Proposal FAQs and provide comments on the impact it will have on your restaurant or hospitality business.

REVIEW COMMENTS & SUBMIT YOURS

Department of Labor’s Proposed Overtime Rule

TUESDAY, September 26, 2023, 1 p.m. – 3 p.m. Eastern Time
WEDNESDAY, September 27, 2023, 1 p.m. – 3 p.m. Eastern Time

Via Microsoft Teams Meeting
The next Office of Advocacy Roundtable will meet virtually to discuss the Department of Labor’s (DOL) Proposed Overtime Rule. DOL proposes to increase the minimum salary threshold for the “white collar” exemption under the Fair Labor Standards Act (FLSA) from $35,568 to $55,068 annually.  This threshold may be increased in the final rule based on the most recent data available, possibly up to $60,209.  These meeting will be held virtually using Microsoft Teams.

Send your RSVP for ONE of these meetings to Janis Reyes at [email protected].

We anticipate a large turnout for these events.
A meeting link will be provided to you when you RSVP.
 
Draft Agenda
 
I.          Introductory Remarks (1:00 PM – 1:20 PM)     
Janis Reyes, Assistant Chief Counsel, SBA Office of Advocacy
Jessica Looman, Principal Deputy Administrator, Wage and Hour Division, DOL

Ms. Looman will provide a high-level overview of this proposed rule.
After her briefing, the agency will listen to small business concerns. Comments expressed during this roundtable do not take the place of submitting written comments to the regulatory docket. Written comments on this rule are due to DOL on November 7, 2023. 
 
II.       Input from Interested Small Entities (1:20 PM – 3:00 PM)

We would welcome you input on issues such as:

• Whether DOL’s proposed salary level threshold should be raised, and whether the DOL’s proposed threshold levels are appropriate levels for small businesses.
• The numbers of small businesses, small non-profits and small governmental jurisdictions that would be affected by this rule.
• The compliance costs of increasing the salary level to small entities, such as increasing wages and managerial costs.
• Possible regulatory alternatives that would minimize the compliance costs for small entities while achieving regulatory goals.
• The best methodology for updating the salary level and the appropriate frequency of updates.

*** Roundtable meetings are open to all interested persons and are intended to facilitate an open and frank discussion about issues of interest to small business. These meetings are off the record and not intended for press purposes. Direct quotations of presenters or attendees may not be used without direct written approval of the person(s) making the statement. All press inquiries should be sent to [email protected]. Agendas and presentations are available to all.***
 
Topic Summary
 
1.     Overview of Department of Labor’s Overtime Proposal
On August 30, 2023, the Department of Labor (DOL) proposed a rule which will increase the minimum salary for the “white collar” overtime exemption from $35,568 to $55,068 annually (equivalent to $17.10 per hour and $26.48 per hour, respectively). To be exempt from overtime pay, workers must be paid a salary of at least $55,068 and must also meet certain job duties for executive, administrative, and professional employees. Workers with a salary below this threshold must be paid overtime if they work more than 40 hours a week. This threshold may be increased in the final rule based on the most recent data available, possibly up to $60,209 (equivalent to $28.95 per hour). DOL will also increase the total annual compensation requirement for highly compensated employees from $107,432 per year to $143,988 per year. DOL also plans to automatically update earnings thresholds every three years.
DOL estimates that this rule will have the following Year 1 costs for small entities:

• An average total cost of $4,323 per entity, with a range of total costs of $1,833-$146,781 per entity.
• One hour to read the rule.
• 75 minutes of manager costs for wage adjustment.
• Average payroll increases of $2,638 per affected entity, with an estimated range of payroll cost increases of $768-$103,871.
• Average weekly earnings for affected workers in small entities are expected to increase by about $6.91 per week per affected worker.
• DOL estimates the following costs per small entity in selected industries: construction ($4,028), retail trade ($5,210), food services and drinking places ($9,332), and nonprofit ($3,570).
• DOL estimates that small entities will spend 10 minutes to respond with automatic salary updates every three years.

Comments on this rule are due November 7, 2023.

• Advocacy contact: Janis Reyes.
• Read the DOL press release and FAQ.
• Submit electronic comments here.

 
Thanks,
 
Janis C. Reyes
Assistant Chief Counsel
SBA Office of Advocacy
Phone Number: (202) 798-5798
E-mail:  [email protected]

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