New Proposed Fair Labor Standards Act Overtime Rules

Posted on under Articles, Business, Employment.

The Department of Labor (DOL) finalized its proposed rules for overtime eligibility. As some may recall, the DOL attempted to issue new overtime rules back in 2015, but those overtime rules were enjoined by a federal district court in 2016. Below is a summary of the final 2019 overtime rules:

  • Under the current guidelines, employees that earn under $455 per week ($23,660 annually) are required to be paid overtime for any time worked over 40 hours per week. The new guidelines propose to increase the minimum salary level for an exemption to paid overtime to: $684 per week or $35,568 annually. Thus, employees making over $35,308 annually do not need to be paid overtime, so long as these employees meet the DOL’s so called white-collar exemption and perform certain duties.
  • The exemption for highly compensated employees will increase from the current $100,000 to $107,432 per year.  Keep in mind that these employees are still subject to the reduced duties test.
  • There will be no automatic updates to the salary thresholds.
  • The new rules are set to take effect in January 1, 2020.

Chicago’s New Predicative Scheduling Ordinance

On July 24, 2019, the Chicago City Council and Mayor Lori Lightfoot approved the “Chicago Fair Workweek Ordinance.” The Ordinance, which goes into effect January 1, 2020, requires covered employers to give covered employees at least 10-day notice of their work schedule. Beginning July 1, 2022, the advance notice time period will increase to at least 14 days. There are certain exceptions for emergency situations and other mutual agreements between employees.

Under the ordinance, covered employers are defined as for-profit employers with over 100 employees and nonprofit employers with over 250 employees. The industries that are covered include: retail, building services, warehouse services, health care, hotels, manufacturing, and restaurants. Covered employees are defined as salaried workers earning less than $50,000 and hourly workers earning less than $26 per hour.

Employer fines for violation of this ordinance range from $300 to $5,000 for each offense. 

Navigating the Layers of Employment Law

Today, more than ever, employers must be prepared to navigate multiple levels of employment laws that regulate their business, nonprofit, or religious organization. An employer’s knowledge and understanding of federal employment law is no longer sufficient to mitigate risk and ensure compliance with the law.

Depending on where they are incorporated and offer employment, employers can face up to four separate levels of employment laws and regulations. These include employment laws at the city, county, state, as well as federal levels. In some instances, a city may be able to opt out of a county or state employment law, but many employers, especially in larger cities, are still required to comply with city, state, and federal employment laws. In addition, these city, state, and federal laws may be in conflict with another. Thus, further complicating an employer’s understanding of what they need in place to maintain compliance with all employment laws and regulations. This regulatory burden is particularly acute for small businesses, nonprofits, and religious organizations who do not have the budgets or funding to hire human resource or compliance managers to monitor and advise them on employment law.

If you have questions about your business, nonprofit, or religious organization’s employment policies or employment law compliance in general, the attorneys at Bea & VandenBerk are here to work with you in a cost-effective way to help understand and maintain your organization’s compliance all levels of employment law.

This article is provided for general information and should not be relied upon as legal advice for a specific situation.  If you are in need of specific advice or legal representation, please do not hesitate to contact us.

©2019 Bea & VandenBerk