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New Overtime Rule Headed to White House For Review


In 2016, the President Barack Obama era Department of Labor proposed raising the minimum salary level for exemption as an executive, administrative, or professional employee from $455/week ($23,660/year) up to $913/week ($47,476/year).  (Under this proposal, positions that once were considered executive, administrative, or professional would be subject to overtime pay.  As a result, this proposal would have required employers to pay overtime to these employees that earned less than $47,476/year).  Employers and pro business groups were sent into a frenzy as they took steps to try and block this change from taking effect.  (Some employers even switched white collar employees from salaried positions to hourly positions to try and get ahead of the proposed overtime changes).  

As readers will likely recall, a permanent injunction was issued in federal district court to block the implementation of this new overtime rule.  Once President Donald Trump took office, employers and pro business groups breathed a sigh of relief as they expected this iteration of the Department of Labor would not seek to enact such a sweeping change to the overtime rules.  In fact, President Trump had given signs that while he supported raising the overtime threshold, he did not support the figures proposed by President Obama’s administration.  An appeal of the injunction was subsequently filed with the Fifth Circuit Court of Appeals to, in part, give incoming Labor Secretary Alexander Acosta the ability to preserve options for the Department of Labor and challenge an apparent limit of the Department of Labor’s rulemaking authority (seemingly imposed by the issuance of the permanent injunction).  However, concern started to set in after the Department of Labor failed to take any action in regard to the appeal.  Some started to worry that the Fifth Circuit could reverse the injunction and give employers less than 30 days to comply with the new overtime threshold before it would take effect.  Complicating matters has been concern that if Republicans lose control of the White House in 2020, the $47,476 threshold could seemingly take effect without any further action needing to be taken by the Department of Labor.

With that being said, after long last, the Department of Labor has sent its draft of the Notice of Proposed Rulemaking to the White House Office of Management and Budget for review.  This draft is expected to propose setting a salary level somewhere in the low to mid $30,000’s, although exact numbers will not be known until they are published in the Federal Register, likely in March.  Once published, the public will have the opportunity to comment on the proposal during a required “notice and comment” period (often spanning 90 days, but it could be extended for an additional period).   If adopted, this proposed rule would replace the final rule issued in 2016, much to the relief of employers and pro business groups.


For additional information:  https://www.littler.com/publication-press/publication/dol-sends-proposed-overtime-rule-white-house

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