Final changes to federal overtime rules expected to go into effect as early as this summer.
UPDATE FROM AH&LA ON 5-12-16: While not publicly noticed or confirmed by the Administration yet, there is credible intelligence that the Department of Labor and the White House will release its final overtime regulations early next week, likely on Monday, May 16th. The salary threshold is expected to be set at $47,000, there will be an annual adjustment and the implementation date will be sometime after the November elections. None of this has been confirmed by the Administration.
(May 9, 2016) Significant changes to the federal overtime exemption rules proposed last year by the Department of Labor are getting closer to becoming a reality. Several news sources report that the final changes will be published in May, and employers may have as little as 60 days after publication before the law goes into effect. The threshold for salaried employees to be exempt from overtime pay will more than double from the current minimum of $23,660 a year.
In June 2015, the US Department of Labor released a 295-page proposed revision to federal overtime laws which included setting the salary level for exempt employees at $50,440, or $970 a week. Under the changes, employees earning below this level would be eligible for overtime pay. Discretionary bonuses would not count toward the salary threshold.
The proposal also calls for automatic adjustments to the threshold based on inflation or wage growth, and it left open the possibility that the DOL could institute a “duties test,” rigid guidelines that define the types of employees who must be paid overtime.
The DOL received over 250,000 comments before ending the comment period in September 2015. In March of this year, it submitted its final changes to the White House Office of Management and Budget (OMB) for review. The OMB review, which typically takes at least a month, is the last step before publication of final rule changes.
Forbes.com and other news sources have reported that the DOL will lower the threshold to $47,000 a year. They also report that the changes could go into effect as early as 60 days after publication, leaving employers little time to prepare.
AH&LA and the NRA working on legislation to put rule changes on hold
The American Hotel & Lodging Association, the National Restaurant Association, the US Chamber of Commerce and a large group of organizations have been working with legislators to delay the implementation of any changes to the overtime exemption rules.
In March, the Protecting Workplace Advancement and Opportunity Act was introduced in the US House of Representatives and Senate. The legislation would put the rule on hold and require DOL to conduct an economic impact analysis before any revisions go into effect.
RESOURCES:
“White Collar” Exemption Evaluation (Fisher & Phillips, LLC)