DOL Overtime Rule (Re-Visited)

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Most employers are aware that the Obama administration’s attempt to increase the salary threshold for exempt employees was blocked in December 2016.  The failed rule sought to increase the required salary for exempt employees to $47,476 per year.  Labor Secretary Acosta has indicated that he supports raising the salary threshold and, since the summer of 2018, the DOL has been conducting listening sessions on potential revisions to the overtime exemptions. It is expected that the DOL will issue a notice of proposed rulemaking in early 2019, and that the proposed rule will increase the salary threshold and may update the duties tests for the exemptions. Thereafter, the DOL will receive public comments on the proposed rule. With this timeline, a new rule is unlikely to be adopted until 2020.

It has been a challenge for employers to handle the uncertainty surrounding the DOL’s efforts to change the overtime exemptions. However, the uncertainty has had the benefit of motivating employers to evaluate how they classify employees and to carefully consider how managers and supervisors are paid. Hopefully, these efforts will make compliance with whatever rule is adopted less complicated and costly.

We will continue to monitor developments.

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