On March 22, 2019, the U.S. Department of Labor (“DOL”) issued proposed regulations that, if adopted in proposed form, would substantially increase compensation thresholds used to determine whether executive, administrative, and professional employees must be paid overtime. The DOL has provided an explanatory fact sheet, available here.
Specifically, the proposed regulations would:
Implications
Among other repercussions, the new rules could indirectly affect retirement plans, including 401(k) plans, because increased overtime eligibility might result in higher wages. This may lead to increased retirement plan contributions under plans that define compensation by including overtime pay. Plan sponsors would be well advised to determine whether their plans are likely to be affected, and to what degree, by performing a census of those plan participants who are likely to be affected by the new overtime rules.
As always, specific questions should be directed to your ERISA counsel or other professional advisors.
