DOL Seeks Public Feedback for Revisions to Rule for Overtime Eligibility

August 1, 2017

On Tuesday, July 25, 2017, the United States Department of Labor (“DOL”) issued a press release announcing that it intended to publish a Request for Information (“RFI”) concerning the Fair Labor Standards Act (“FLSA”) overtime rule. In general, the RFI provides an opportunity for the public to comment on issues related to the potential revision of the FLSA regulations concerning minimum wage and overtime by posing specific questions to which the public can respond.

The RFI is the latest response by the Trump administration to the DOL overtime rules published in 2016 during President Obama’s term. Under the 2016 Final Rule, the DOL increased the salary that would make a person exempt from overtime from $455 per week to $913 per week. It also established a mechanism for automatic updates of the salary level every 3 years. No changes were made to the standard duties test. The DOL published the 2016 Final Rule on May 23, 2016, with an effective date of December 1, 2016. But it never took effect because it was challenged in Court.

As noted in the new RFI, many employers have expressed concerned that the standard salary level set in the 2016 Final Rule was too high. Employers claimed that the heightened salary level inappropriately excluded from exemption too many workers who pass the standard duties test. Employers were also concerned about the financial impact on their business of having to comply with the new rules given that it would have to pay significantly more overtime or raise the salaries of many workers to avoid the implications of the rule. Indeed, as noted in the RFI, it was estimated that 4.2 million salaried white collar workers would, without some intervening action by their employers, change from exempt to non-exempt status.

As anticipated by many, the new RFI indicates a desire on the part of the DOL to reverse the 2016 overtime rules. The questions in the RFI relate to among other things, the salary test for overtime and highly compensated employees, the duties test, and the relationship between at a region’s particular cost of living may have on the salary test. The RFI also asks whether updating the salary level for inflation would be appropriate. This is consistent with many people’s expectation that the DOL may well raise the salary level, just not as much as the 2016 rule did. But the questions in the RFI asks questions concerning a variety of other matters related to overtime pay and qualifications for the exemption. The RIF seeks feedback on the possibility of setting different pay levels based on geographic area, as well as nixing the salary test altogether. In that way, the RFI indicates that the DOL may be considering a variety of ways to determine which workers are entitled to overtime pay. The complete RFI and all questions can be found here: Stay tuned!