HR Management & Compliance

DOL Submits Request for Information on the Overtime Rule

The U.S. Department of Labor (DOL) has submitted a Request for Information (RFI) regarding the final overtime rule to the Office of Information and Regulatory Affairs (OIRA) for its review. An RFI is an optional step used by governmental agencies when drafting rules in order to obtain public input on whether a new rule or changes to an existing rule are warranted.

The RFI in this case may be a signal that new rulemaking may occur regarding overtime and the salary threshold for exemption. Secretary of Labor Alexander Acosta has indicated that the increase in the salary level under the final regulations would have been too drastic a change for employers.

A federal district court temporarily blocked the DOL’s final overtime rule on November 22, 2016, just days before it was scheduled to take effect. At the request of 21 states, the U.S. District Court for the Eastern District of Texas granted an emergency injunction request, halting the new regulations. DOL’s motion to stop the lawsuit was denied on January 3, 2017.

The DOL appealed, but then requested and was granted three extensions until June 30th, to file the reply brief in order to give the Trump Administration time to review the overtime issues.

The final regulations would have required employers to pay overtime to anyone earning less than $913 per week (which amounts to $47,476 annually) beginning December 1, 2016. The DOL’s regulatory changes would also have raised the threshold for highly compensated employees
from $100,000 to $134,004 per year as of December 1, 2016. Beginning on January 1, 2020, and every 3 years thereafter, both the standard salary threshold and salary level for highly compensated employees would have been automatically updated.

As things currently stand, until further action, the minimum salary threshold for the white-collar exemptions will remain where it has been since 2004, at $455 a week. The salary threshold for the highly compensated employee exemption will remain at $100,000 per year.

An RFI will give individuals and groups such as employers, employees, political parties, nonprofit organizations, labor unions, and trade organizations the opportunity to provide input on the final rules, what they think should change, and whether there should be changes at all. The DOL will likely receive comments on the costs and difficulties for employers to implement such a large salary threshold for exemption, the effect it’s had on those employers who have actually implemented the new threshold, how the impact varies in different geographic areas around the country, and how some industries are hit much harder than others.

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