Inching Closer to a New Overtime Rule?

Adams, Julie 300dpi
Julie Adams

In 2016, the U.S. Department of Labor (“DOL”) modified 29 C.F.R. § 541 – which regulates  the Fair Labor Standards Act’s (“FLSA”) white-collar exemptions (administrative, executive, professional, computer, and outside sales) – often referred to as the “Overtime Rule.”  Among other changes, the new Overtime Rule increased the salary threshold for white-collar employees from $23,660 to $47,476.  Before the new Overtime Rule took effect, Judge Amos Mazzant, a federal district judge in Texas, temporarily blocked the rule by entering an injunction in Nevada v. United States Dep’t of Labor, 227 F. Supp. 3d 696 (E.D. Tex. 2017).  Rather than appeal Judge Mazzant’s decision and pursue implementation of the revised 2016 rule, the DOL elected, instead, to proceed with a new rulemaking. 

To that end, on July 26, 2017, the DOL issued a Request for Information (“RFI”), which elicited thousands of comments.  After the RFI comment period closed on September 25, 2017, the DOL remained relatively silent on the status of the rulemaking process.  That changed in September 2018, however, when the DOL held a series of listening sessions to gather information regarding the public’s views on ways to modernize and update the Overtime Rule.  The DOL’s agenda for the listening sessions focused on the following questions (all of which relate to the salary test):

  • What is the appropriate salary level (or range of salary levels) above which the overtime exemptions for bona fide executive, administrative, or professional employees may apply?
  • What benefits and costs to employees and employers might accompany an increased salary level?
  • What is the best methodology to determine an updated salary level?
  • Should the Department more regularly update the standard salary level and the total-annual-compensation level for highly compensated employees?

The listening sessions were held in Atlanta, GA, Seattle, WA, Kansas City, MO, Denver, CO, and Providence, RI, with the last session wrapping on September 24.

This has left many wondering, “When can we expect a proposed updated Overtime Rule?”  While there is no firm deadline, the DOL forecasted, in its spring 2018 regulatory agenda, that it would propose a new overtime regulation in January 2019.  Further, on September 24, 2018, Bloomberg reported that the DOL is still “eyeing January as a soft deadline to unveil a proposed regulation that would revise overtime eligibility under federal wage-and-hour law.”  Accordingly, stay tuned in the coming months for information regarding Notice of Proposed Rulemaking announcements and when we can expect a new revised Overtime Rule from the DOL.

The Department of Labor’s Wage and Hour Division will host a public listening session in Washington D.C. on the proposed regulations on October 17, 2018.

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