New Labor Secretary To Seek Public Input On Stalled Overtime Rule

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06/27/2017

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New Labor Secretary To Seek Public Input On Stalled Overtime Rule

 By: Gregory Blueford

Last week, new Labor Secretary Alexander Acosta announced that the Department of Labor (“DOL”) will submit a request for information (“RFI”) on the DOL’s proposed overtime rule in two to three weeks. The proposed overtime rules, explained here, seek to increase the federal “white collar” salary basis threshold for overtime exemption from $23,660 to $47,476. The proposed rule has been blocked from going into effect here by the federal courts after a challenge from 21 states since November 2016 and has been continuously delayed since President Trump was inaugurated and Secretary Acosta was confirmed.

An RFI is a “pre-rulemaking” procedure where the DOL asks the public, here employers and employees, for input on an issue to determine whether a new rule or changes to an existing rule are needed, and comments on what course the agency should take if the agency decides to move forward. Here, the DOL is likely to seek input regarding the anticipated economic impact of the proposed increase to the minimum salary level on both employers and employees to be exempt from overtime and what affect the rule may have on nonprofits, state and local governments and small businesses. The DOL may also be looking for a compromise rule that would be less harmful for businesses but still increase the salary basis test threshold. During his confirmation hearing in March, Secretary Acosta did not fully condemn the proposed rule. Instead, Secretary Acosta suggested that a hike to the salary basis test threshold for the proposed overtime rule should more or less reflect inflation.

COUSEL TO MANAGEMENT:

While the original Obama-era proposal will more than likely never go into effect, employers should expect and prepare for at least a modest rise in the federal overtime salary exemption threshold. But, as stated above, the DOL will be taking public comments on the proposed rule and employers can make themselves heard. Should the DOL formally request the RFI in 2-3 weeks as announced by Secretary Acosta, we will provide the process for employers to submit feedback to the DOL.

Do not forget that the overtime exemption is not determined solely by the salary basis test but also by also by the “duties test,” which requires that employees also perform specific duties to be exempt from overtime. For all questions regarding overtime, contact the experts at The Saqui Law Group.

 

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