U.S. DEPARTMENT OF LABOR ISSUES NEW PROPOSED OVERTIME REGULATIONS

It has been rumored for some time that the Department of Labor’s new overtime regulations would raise substantially the salary a worker must be paid in order to qualify for a white collar exemption.  Monday evening, President Obama confirmed that the new DOL regulations will raise the required salary from $23,660 a year — where it has stood since 2004 —  to $50,400 a year.  The President said this change will expand overtime to five million additional workers, but some estimates place the number of affected workers much higher.

Yesterday, the DOL revealed a few additional details about the new regulations, which the President will discuss at length during a stop in Wisconsin later this week.  The DOL says that, in addition to raising the salary level for exempt employees, the new regulations also will “[p]rovide greater clarity for millions more workers so that they – and their employers – can determine more easily if they should be receiving overtime pay,” and “[p]revent a future erosion of overtime and ensure greater predictability by automatically updating the salary threshold based on inflation or wage growth over time.”

Anyone who has ever tried to apply the rules relating to overtime exemptions surely will agree that “greater clarity” is necessary, but when it comes to lawmaking, attempts at clarification often bring only greater confusion.  Let’s hope that’s not the case here.  That’s particularly true as we wait to see what the DOL does with respect to the “duties test” in the regulations.  There were no changes in that area in the NPRM which was released yesterday, but it’s hard to imagine that the changes the DOL did propose to the other regulations would be as effective without some consideration of how the “duties” part of the exemptions is impacted.  Certainly, the DOL was not shy about their interest in comments in this area, so stay tuned.

Once the proposed new regulations are made public, which the DOL says will happen soon, they will go through a public comment period.  The DOL will consider the public comments, and then publish a final version of the regulations, along with an effective date, which probably will be sometime in late 2016 at the earliest.  Of course, we’ll have the latest for you on the final regulations whenever they are released.

 

 

 

 

For more than 20 years, Rodney Bean has provided practical, no-nonsense advice to help leading employers develop and apply labor and human resources strategies that are both compliant and prudent. He regularly counsels employers on most aspects of federal and state employment law, and has broad experience in wage and hour compliance and affirmative action planning.
 
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