Here We Go Again! DOL Seeks Public Comment on Revising Overtime Rules

We assumed that the Trump administration would eventually return to the issue of the proper salary threshold for overtime exemption under the Fair Labor Standards Act.  That time has come as the U.S. Department of Labor (DOL) has just issued a request for comment and information on the exemption threshold.

Important Questions

Titled “Request for Information; Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees”, the DOL’s request seeks public input on the following 11 questions relating to the overtime threshold:

–  Would updating the 2004 salary level for inflation be an appropriate basis for setting the standard salary level and, if so, what measure of inflation should be used?

–  Should the regulations contain multiple standard salary levels? If so, how should these levels be set (e.g. by size of employer, census region, etc.)?

–  Should the Department set different standard salary levels for the executive, administrative and professional exemptions and, if so, should there be a lower salary for executive and administrative employees?

–  Should the standard salary level be set within the historical range of the short test salary level, the long test salary level, or something totally different?

–  Does the standard salary level set in the 2016 Final Rule work effectively with the standard duties test?

–  To what extent did employers, in anticipation of the 2016 Final Rule’s effective date, increase or decrease employee salaries or make other changes to address the new threshold?

–  Would a test for exemption that relies solely on the duties performed by the employee without regard to the amount of salary be preferable and if so, what elements would be necessary in a duties-only test?

–  Does the salary level set in the 2016 Final Rule exclude from exemption particular occupations that have traditionally been covered by the exemption?

–  Should the inclusion of nondiscretionary bonuses be retained and if so, at what percentage or level?

–  Should there be multiple total annual compensation levels for the highly compensated employee exemption?

–  Should the standard salary level and the highly compensated employee total annual compensation level be automatically updated on a periodic basis?

The public will have 60 days to submit answers, comments or other helpful data.

Bottom Line

It is unknown where the current administration would like to end up but we assume it will be somewhere between the current $23,660 per year and the Obama administration threshold of just over $47,000 per year.

In addition, given the questions that the DOL is asking, it seems quite possible that they will also look to implement more changes than merely the dollar threshold for exemption.

It will be interesting to see just what sorts of comments the public offers and what the DOL plans to do next.