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DOL proposes increase to FLSA overtime income cap

About 1.1 million workers throughout New York and the rest of the country would qualify to receive overtime time pay if a new rule proposed by the Department of Labor is implemented. The Fair Labor Standards Act requires employers to pay workers overtime when they work more than 40 hours in a workweek, but the landmark 1938 law does not cover all employees. Managers, commissioned salespeople and workers who earn over a certain amount are not entitled to overtime under the FLSA.

The current income cap for non-management workers to qualify for overtime pay is $23,660. This figure was set in 2004. The rule proposed by the DOL would raise this cap to $35,308. An effort was made to raise the income cap to $47,476 during the Obama administration, but a federal judge blocked the change just days before it was scheduled to go into effect. Had it not been blocked, the Obama-era change would have extended overtime coverage to about 4.2 million workers.

Analysts see the proposal as a compromise measure that will not please labor or business advocates but has a good chance of being implemented. Economists point out that the proposal may have little real-world impact because a thriving economy and extremely low unemployment have made the labor market far more competitive and pushed up wages.

Attorneys familiar with state and federal wage and hour laws may encourage employers to settle unpaid overtime disputes quickly and discretely to avoid official sanctions and a flood of similar claims. To add substance to these arguments and give employers even more reason to settle, attorneys could urge workers who may have been paid unfairly to gather supporting evidence such as paycheck stubs, time cards and work schedules.

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