The U.S. Department of Labor has released its new overtime rule, with a pay threshold significantly lower than the one put in place by the Obama administration, which is being welcomed by observers in the hotel industry.
Starting in January 2020, the new rule, under the Fair Labor Standard Act, would classify employees who earn at least $684 per week ($35,568 a year) as exempt, allowing employers to place them on salary. The government believes the threshold, which is an increase from the $455 a week ($23,660 a year) threshold set in 2004, will extend overtime pay requirements to approximately 1.3 million additional employees.
The Obama administration had proposed a higher threshold amount, $47,476 a year, but a federal judge issued an injunction in late 2016 and the U.S. Court of Appeals for the Fifth Circuit upheld an appeal of abeyance in 2017. Following these decisions, the labor department enforced the 2004 threshold and reviewed another increase.
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