The rule is under review to ensure it does not conflict with applicable law and the actions of other regulatory agencies. It is expected to face legal scrutiny if it is finalized.
03/11/2024 1:10 P.M.
2 minute read
The U.S. Department of Labor (DOL) is expected to release the final rule on changes to overtime salary standards under the Fair Labor Standards Act (FLSA) in April.
The rule, Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees, is now under review by the Office of Management and Budget, which ensures that regulations are in line with applicable law and do not conflict with actions of other regulatory agencies, as the final step before the DOL releases the specifics of the rule.
It would update the regulations under the FLSA “implementing the exemption from minimum wage and overtime pay requirements for executive, administrative, and professional employees.”
Most salaried employees paid less than $1,059 per week, or about $55,000 per year, would be guaranteed overtime pay under the rule, according to the DOL.
Comments on the Notice of Proposed Rulemaking closed in November 2023. The agency received more than 26,000 comments.
With the proposed increase in the overtime salary threshold from the current $35,568 ($684 per week) to the $55,000 ($1,059 per week) mark, approximately 3.6 million workers would be eligible for overtime pay under the proposed rule, according to the DOL.
Through the proposed rule, the DOL seeks to update and revise the regulations for determining whether certain salaried employees in executive, administrative or professional roles (EAP), also classified under the FLSA as the “white collar exemption,” would qualify for the guaranteed overtime pay, ACA International previously reported.
The DOL also proposes to increase the annual compensation requirement for “highly compensated employees” to $143,988, which is based on the annualized weekly earnings of the 85th percentile of full-time salaried workers nationwide.
There would be automatic updates to the overtime threshold every three years if the rule is approved.
ACA joined the Partnership to Protect Workplace Opportunity and more than 200 organizations representing employers from a range of industries in comments (PDF) urging the DOL to reverse course on its proposal to increase the minimum salary for employees exempt from overtime pay requirements under the FLSA, ACA previously reported.
After comments on the rule closed, the House Committee on Education and the Workforce held a hearing on the negative impacts of the rule.
U.S. Rep. Eric Burlison, R-Mo., proposed a bill, the Overtime Pay Flexibility Act (H.R.7367), to stop the rule from being finalized, implemented or enforced, according to an update from Brownstein Hyatt Farber Schreck LLP.
The rule is expected to have legal scrutiny if finalized.
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