The Department of Labor issued final rules on May 18 that will more than double the salary threshold for overtime pay – making an additional 4.2 million employees eligible for overtime.
The department's rules, which become effective Dec. 1, increase the threshold exemption from $455 per week to $913 each week. That represents a decrease from the threshold of $970 the department originally proposed last year, when it said an additional 4.6 million workers would be eligible for overtime.
The minimum salary threshold will be updated every three years beginning in 2020.
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Under current law, there was an exemption for highly compensated employees who make at least $100,000 but whose duties do not exempt them from overtime pay. The new rules increase that exemption to $134,000.
The new rules also state that up to 10% of the standard salary level can come from non-discretionary bonuses, incentive pay and commissions as long as they are paid at least quarterly.
Responding to the final rules, NAFCU Executive Vice President of Government Affairs and General Counsel Carrie Hunt said the plan is likely to have unintended consequences and will impede growth for many white collar workers.
"NAFCU is concerned [credit unions] simply will not be able to absorb this large increase without directly impacting the services they provide," Hunt said. "Ultimately, this rule could hurt the very people it is trying to help."
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