Overtime Policy Developments and Resources

(Updated September 24, 2019)

The U.S. Department of Labor (DoL) announced changes to overtime compensation requirements, with new requirements taking effect on January 1, 2020. Final regulations issued by the DoL will increase the number of workers eligible for overtime compensation, with a more moderate approach than previously proposed under the Obama Administration.

On August 31, 2017 a federal court formally struck down the Obama Administration’s 2016 attempt at new regulations. On November 22, 2016, a federal judge in Texas imposed a nationwide injunction halting implementation of the Obama Administration’s overtime regulations that were due to take effect on December 1, 2016, as reported in a League news update. The rule that had been set to go into effect would have raised the threshold for overtime compensation from $455 per week ($23,660 for a full-year worker) to $913 per week ($47,476 for a full-year worker).

The new regulations (PDF) posted on September 24, 2019 rescind the 2016 regulations and replace them with new rules that adjust the threshold for overtime compensation to $684 per week ($35,568 for a full-year worker).

In addition to raising the standard salary level, the DOL’s final rule allows employers to use nondiscretionary bonuses and incentive payments that are paid at least annually to satisfy up to 10% of the standard salary level. The total annual compensation level for “highly compensated employees” (HCE) will also increase from $100,000 to $107,432 per year, but the Department is not making any changes to the standard or HCE duties test.

Soon after joining the Trump Administration, Labor Secretary Alexander Acosta said that the Department would start the process for revising the Obama Administration’s overtime rule. At his Senate confirmation hearing in March, Acosta said it was unfortunate that a threshold could go unchanged since 2004, but that doubling the limit as the Obama Administration attempted “does create what I’ll call a stress on the system.”

On September 25, 2017, the Department received many thousands of comments responding to an initial request for input on the topic. The League filed comments (PDF), along with other national nonprofit organizations, asking for a phased-in approach to changes, clear guidance for nonprofits, and additional opportunities to provide input when more specific regulatory changes are proposed.

The League is an active member of the National Council of Nonprofits and Independent Sector (PDF). Comments filed by each organization in May 2019 in response to draft regulations re-affirmed the need for a phased in implementation of the new requirements and the need for greater clarity about how the rules apply to nonprofit workers.

Is your orchestra in compliance with overtime rules under the Fair Labor Standards Act? It is also important to understand your state’s overtime rules as whichever threshold is most generous to workers is what must be implemented by employers. We will keep adding resources to this page.

• Final Rule (effective January 1, 2020) (PDF)
• Department of Labor General Overtime Resources

In response to questions and concerns raised by the nonprofit community regarding the 2016 Obama Administration effort to increase the number of workers eligible to receive overtime compensation, the Department of Labor provided nonprofit-specific information. It is unclear whether fresh nonprofit guidance will be issued following announcement of the new rule.

• U.S. Department of Labor Guidance for Non-Profit Organizations on Paying Overtime under the Fair Labor Standards Act (as of 2015) (PDF)

Questions?

Please contact Heather Noonan, League Vice President for Advocacy, with related questions.