The U.S. Department of Labor (DOL) will not release its final rule re-defining which employees are and are not exempt from the right to be paid overtime until late 2016, Solicitor of Labor Patricia Smith has announced.
The announcement regarding the timing of the expected changes to the “white collar” exemption for executive, administrative, and professional employees raises the possibility – of interest to all private sector employers — that the time between publication of the final rule and its effective date next year will be relatively short.
The last time the overtime rules under the Fair Labor Standards Act (FLSA) were revised, in 2004, the department provided 120 days for employers to review the new regulations and to make the necessary changes in their classifications and practices. That might not be the case with the new revisions.
The proposed new rule was released on June 30 of this year and received 264,093 comments during the comment period this summer. It more than doubles the exempt threshold qualification from the current $455 a week to the DOL’s proposed $970 a week, with annual raises after it becomes effective. In spite of the numerous comments, the final rule is anticipated to closely resemble the proposed original rule.
The proposed revised rule would extend overtime protections to nearly 5-million white collar workers in the United States within the first year of its implementation.
As a practical matter, for employees who often work more than 40 hours a week employers will need to double their salaries to continue to pay them salaries without overtime, or make other changes to their compensation practices.
