Update: Proposed Changes to Overtime Regulation Close to Being Final
March 16, 2016 Contact: Bill Balek
Based on recent actions by the Department of Labor (DOL), it now appears that the proposed revisions to the overtime regulations may be published as a final rule as soon as mid-April. Industry insiders predict the revisions to the overtime regulations will have a substantial adverse impact on the business community, especially the service sector and other labor intensive sectors.
Of significance, DOL has sent the overtime rule to the Office of Management Budget’s (OMB) Office of Information and Regulatory Affairs (OIRA) for their review. OIRA reviews agency draft and proposed final regulatory actions, and is the last step before a final regulation is issued. Most importantly, this means a final overtime pay rule could be published as early as 30 days, but could take longer.
ISSA will continue to work with the Partnership to Protect Workplace Opportunity to advocate the business community’s interests before OMB, but we need your help in ensuring political support for these efforts.
Action Needed. ISSA, therefore, encourages its members to contact your U.S. Representatives and Senators and express your strong opposition to the proposed cumbersome and costly changes to the DOL’s overtime regulations.
Click below for an easy way to contact your members of Congress about this important issue.
Background. Under the Fair Labor Standards Act, there is a two-part test in order to exempt an employee from overtime pay eligibility. First, the employee has to earn over a certain amount per week/year; and second, the employee has to hold a position that falls within what is known as a “white collar” exemption where the employee performs duties that are executive, administrative, or professional in nature. This second qualification is known as the “duties test.”
The proposed rule seeks to increase the salary threshold from $455/week ($23,660 annually) to $970/week ($50,440 annually). High compensated employees’ salary level would also be increased from $100,000/year to $122,148/year. The proposal also seeks to establish a mechanism for salary thresholds to be adjusted automatically as a function of inflation or a certain percentage of salaried workers.