Proposed Changes to Dept. of Labor Overtime Calculations

This article covers new developments in the human resource (HR) arena along with some of the new Texas legislative changes that will affect counties and county employees.

August 08, 2019

Risk Management News

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This article covers new developments in the human resource (HR) arena along with some of the new Texas legislative changes that will affect counties and county employees.  In future articles, more HR topics will be covered to create awareness and to easily direct you to available resources on these current and emerging HR issues.

Department of Labor:  The Overtime Rule

In 2016, there was a significant employment law development when a federal district court in Texas stopped the Department of Labor from implementing its Final Rule that would have more than doubled the minimum white-collar exemption salary threshold.  As a result, the existing salary thresholds for exempt employees were left in place.

Since then, the Department of Labor (DOL) has proposed raising the minimum white-collar salary threshold from the current $23,660 annually to $35,308 annually or $679 per week.  If an exempt employee does not meet the minimum salary threshold when the regulations are finalized, the exempt employee will have to be reclassified as a non-exempt employee who is eligible for overtime.

Public comments were received from March 22, 2019, to May 21, 2019, and are currently under review by the DOL. It is projected by DOL that the final rules would take effect by January 2020. If this does happen, expect final rules to be published this September or October. But, these are projected dates and are not certain.

For more information, visit the Notice of Proposed Rulemaking: Overtime on the the DOL website.

Department of Labor:  Proposed Changes to the "Regular Rate"

On March 28, 2019, DOL also proposed to clarify and update what items must be included in an employee's "regular rate" of pay and certain types of payments that can be excluded from the "regular rate" of pay.  The "regular rate of pay" is the hourly building block for calculating overtime for non-exempt employees that includes types of compensation such as on-call pay, longevity pay, and shift differentials. The last time DOL issued a rule on the regular rate of pay was in 1968. The proposed rule identifies several excludable benefits not listed in the current regulations.

For overtime worked, a non-exempt employee's overtime is paid out at a rate of 1½ times their “regular rate” of pay for all hours worked beyond 40 hours in a 7-day workweek. For certain law enforcement personnel, deputies and jailers, overtime payout is based on the county’s written 207(k)  policy, which states what the work period is, ranging from 7- 28 days, and what the maximum number of hours that  can be worked in the defined work period in compliance with the federal regulations are. If a county has a compensatory time policy allowing for accruals of compensatory time in lieu of paying overtime out, the “regular rate” of pay is calculated when compensatory time accruals are paid out in cash.

For more information and list of proposed exclusions from the “regular rate” of pay, visit the Notice of Proposed Rulemaking: Regular Rate on the DOL website.

By Mary Ann Saenz-Thompson, SPHR, SHRM-SCP
TAC Human Resources Generalist
Aug. 1, 2019

For further information on these or other topics, members of the TAC Risk Management Pool may contact their TAC HR Consultant.  It is recommended that you additionally consult your county attorney or other legal counsel. Recommendations and information provided are based on current information in the field of Human Resources. This information is not intended to be, nor should they be construed as, legal advice or legal guidance.