You may have heard the recent announcement that the Department of Labor’s (DOL) Wage and Hour Division is holding listening sessions open to the public (which started September 7th) regarding proposed changes to a white-collar exemption regulation called Part 541, otherwise known as the “Overtime Rule.” This regulation controls exemptions from overtime pay requirements for jobs that fall under certain categories, including executive, administrative, and professional.
Overview of the Overtime Rule
The provision enumerated in the Fair Labor Standards Act (FLSA) dictates that non-exempt employees should receive overtime pay for any hours worked over the standard 40 hours per workweek at a rate of no less than time and one-half their regular pay rates. Also, there is no limit of total hours worked for employees aged 16 and older. However, overtime pay is not required on Saturdays, Sundays, holidays, or regular days of rest unless the standard hours’ threshold is met. Any overtime pay earned during a particular workweek must be paid on the standard payday for that period.
The proposed salary threshold for the Overtime Rule, established during the Obama era and enjoined by a federal judge, is $47,476 – meaning that anyone whose salary is less than this amount would be eligible for overtime pay. Tammy McCutchen, a former DOL Wage and Hour Division administrator and current principal at Littler Mendelson, predicts that the DOL will not make the original deadline of October 2018 for the proposed rule, which would cause the proposed salary threshold to go into effect. While she admonishes employers not to panic, she recommends that businesses find the plans they made for the original rule back in 2016. She stated, “If you had plans that you didn’t implement, I hope you didn’t throw them away.”
Purpose of the Listening Sessions
The listening sessions will be held this month in Atlanta, Georgia; Denver, Colorado; Kansas City, Missouri; Providence, Rhode Island; and Seattle, Washington. They are being held to hear the views and opinions of participants who are affected by the proposed revisions to the regulation on the following topics:
- What should the appropriate salary threshold for overtime eligibility be?
- What benefits and costs should accompany an increased threshold for both employees and employers?
- Which methodology should be used to determine the updated salary level?
- What rate should the DOL adopt for the standard salary level and the total annual compensation level for highly compensated employees?
While the DOL’s recent regulatory agenda stated that the proposed rule wouldn’t be issued until January 2019, affected employees should take action and try to get their voices heard at one of the listening session locations, if logistically feasible.