DOL Asks for Input on New Overtime Rule

Author: Michael Cardman, XpertHR Legal Editor

July 25, 2017

The US Department of Labor (DOL) is seeking comment from the public, including employers, on its plans to update the Fair Labor Standards Act (FLSA) overtime rules.

In a Request for Information scheduled to be published in the July 26 edition of the Federal Register, the DOL is asking for feedback about the following questions:

  • Should the salary level be adjusted for inflation? If so, what measure should be used?
  • Should there be multiple salary levels? If so, how should they be set (by size of employer, census region, etc.)?
  • Should there be different salary levels for the executive, administrative and professional exemptions?
  • Should the salary level be set within the historical range of the short test salary level, at the long test salary level, between the short and long test salary levels, or should it be based on some other methodology?
  • Does a standard salary level of $913 per week work effectively with the standard duties test or does it eclipse the role of the duties test in determining exemption status?
  • How did employers respond to the 2016 overtime rule?
  • Would a test for exemption that relies solely on the duties performed by the employee without regard to the amount of salary paid by the employer be preferable to the current standard test?
  • Does a $913 per week salary minimum exclude from exemption particular occupations that have traditionally been covered by the exemption?
  • Should nondiscretionary bonuses and incentive payments (including commissions) be allowed to satisfy up to 10%, or some other percentage, of the standard salary level?
  • Should there be multiple total annual compensation levels for the highly compensated employee exemption and, if so, how should they be set?
  • Should the standard salary level and the highly compensated employee total annual compensation level be automatically updated on a periodic basis to ensure that they remain effective, in combination with their respective duties tests, at identifying exempt employees?

In 2016, the DOL issued new FLSA regulations that would have roughly doubled the minimum salary for many overtime-exempt employees from $23,660 to $47,476. But days before the regulations were to take effect, a federal district court issued a preliminary injunction that prevented the DOL from implementing and enforcing them. The court said the FLSA statute "does not grant the [DOL] the authority to utilize a salary-level test."

The DOL appealed to the 5th US Circuit Court of Appeals to overturn the injunction. On June 30, the Department of Justice (DOJ), on behalf of the DOL, filed a brief asking the 5th Circuit to reaffirm the DOL's statutory authority to establish a minimum salary level for FLSA-exempt employees.

Employers can submit comments by mail or through the Federal eRulemaking Portal for the next 60 days (up until September 25). Comments should include the Regulatory Information Number (RIN) 1235-AA20.