Clock for New DOL Overtime Exemption Regulations Springs Ahead

Posted by: Adair M. Buckner

man with face stuck in book at office with clock in background

The clock has been pushed ahead on a possible compliance date for the new Department of Labor (DOL) rule revising the minimum salary level for white collar overtime exemptions.

As proposed, the minimum salary level to qualify for the administrative, executive, and professional exemptions would be set at the 40th percentile of weekly earnings for full-time employees. When the regulation finally is issued, this likely will be $970 per week or $50,440 per year. This baseline salary amount for exemption automatically would increase each year based on either a percentile of weekly earnings or inflation.

Because DOL sent its final rule revising these exemptions to the White House Office of Management and Budget (OMB) on Monday, March 14, 2016 (much earlier than expected), the final rule could be published in the Federal Register this spring. Earlier, Labor Day was the target date many had predicted for publication.

The political haggling over the proposed new rule after that will be really interesting to watch. After the new rule is published in the Federal Register, Congress has a 60-day period to evaluate it and can vote out a resolution of disapproval to try to nullify the regulation. Such action surely will come under close voter scrutiny while political posturing for the November general election is going on. If Congress votes for disapproval of the rule before the end of President Obamas term, he will most likely veto the resolution. A new president, however, especially a Republican, might not. So, DOL is fast-track processing this proposed new rule, hoping that the politics in the upcoming months are favorable to it, and the new rule is finalized while President Obama is still in office, which gives it a greater chance of implementation.

Employers once again need to start reviewing their plans for action if the proposed new rule is implemented near the end of the year or early next year. The timeline for review has been shortened so that it is more likely to become final.

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