In yesterday’s Advisor, BLR Senior Legal Editor Susan Schoenfeld shared an expert’s advice regarding the new proposed overtime rule from the Department of Labor (DOL). Today, more from Schoenfeld on the legal capacity for DOL to make certain changes as well as what changes might surface in the final version of the law.
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Schoenfeld received her tips from Tammy McCutchen, former administrator at the U.S. Department of Labor’s Wage and Hour Division, at the Society for Human Resource Management’s (SHRM’s) annual conference.
Wait—Can They Do That?
McCutchen says an argument can be made that under the Administrative Procedures Act (the “APA”—the rules governing the agency’s regulation-making powers) the DOL cannot change the duties test because the DOL has not given the public notice and the opportunity to comment on proposed changes to the test as it is required to do under the APA.
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However, it may be that the DOL can skirt the APA’s rulemaking requirements for notice and comment because it has not stated that it will make no changes to the duties tests, and the DOL has asked for comments on some specific changes. This may be the way in which the DOL is attempting to change the duties test without proposing specific changes in the proposed rule, says McCutchen.
One thing is certain—if the DOL does change the duties test without an opportunity for the public to comment on specific proposed changes, litigation—and lots of it—will follow, says McCutchen.
What Is Next?
McCutchen does not believe there will be many changes between the proposed rule and final rule. So she recommends that employers start preparing for the new regulations now by reading the proposed rule and agency FAQs, reviewing potential FLSA status changes based on the proposed salary increase to $50,440, and communicating the impact of salary increases to business leaders.
Employers should start planning for reclassifications now to be ready when the new rules become effective—something McCutchen predicts will happen in June 2016.
As for the other critical deadlines for the new FLSA rule, McCutchen predicts that after the proposed rule is published in the Federal Register in July 2015, the public comment period on the proposed rule will run for 60 days until September 2, 2015.
Then, after the DOL has an opportunity to consider and address all comments, McCutchen believes that the final rule will be published 180 days later on February 8, 2016, with an effective date of June 28, 2016 (120 days after publication of the final rule).
Is she right? As a leading expert on the FLSA, McCutchen’s guess is as good as any and better than most.
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