FLSA Regulations Move Forward and Will Arrive Soon

The Department of Labor’s final FLSA regulations, which are expected to expand overtime eligibility to millions of workers by more than doubling the minimum salary threshold for the key exemptions, moved closer to implementation in the past week. On March 14, the DOL submitted the rule to the Office of Management and Budget for final review, the final step of the process, which can be expected to be completed within weeks. Therefore, we now anticipate that the final regulations will be issued earlier than the previously targeted July 2016 date. These regulations may be made effective 60 days after final publication, according to the DOL.

As readers will recall, the June 2015 notice of proposed rulemaking stated that employees earning less than $50,440 annually would be automatically eligible for overtime. That figure would more than double the current threshold of $23,660 per year. The June 2015 notice, moreover, left important questions unanswered, including whether the DOL would seek to modify the job duties tests for the white collar exemptions. The DOL invited public comment on this issue, because it was “concerned that in some instances the current tests may allow exemption of employees who are performing such a disproportionate amount of nonexempt work that they are not [exempt] employees in any meaningful sense.”

Similarly, the DOL had invited comment about whether it should allow non-discretionary bonuses to satisfy a portion of the salary threshold requirement. Here, too, the DOL provided no indication of how this matter would be treated in the final regulations.

In the wake of the June 2015 notice, the DOL received hundreds of thousands of comments. After the comment period ended, DOL officials made few public statements about the publication date, and this has led to widespread speculation – and concern – in the employer community. Now, with the move of the final regulations to the OMB, they can be deemed imminent.

The current schedule appears aimed at satisfying the Obama Administration’s goal to have the regulations in place before the President leaves office. That goal remains uncertain, however, in light of anticipated legal challenges and possible Congressional action.

These imminent regulations will be one of the wage hour topics in our Third Thursday webinar, scheduled for March 24, 2016, at 12 p.m. ET.