Update on DOL Overtime Rules
August 03, 2017On November 22, 2106, a judge in the Eastern District of Texas issued a preliminary injunction to stop the enforcement of the Department of Labor’s 2016 revisions to the overtime rule. (See https://www.dol.gov/whd/overtime/final2016/ for information on the changes) Since then, many employers have been anxiously awaiting new information about what will happen with the rules. On July 26, 2017, the DOL published a request for information seeking comments on eleven different questions related to this subject.
Some of the proposed questions offer some glimpses at viable options to the contested salary limit conundrum. One such solution would be to have varying salary limits for different regions. Other potential solutions were to divide up salary levels by metropolitan area, size of employer, or even state by state. However, a rule that sets multiple salary limits could affect employees who work in different areas throughout the year or businesses with multi-state operations. It would also require businesses to track wages and salary changes in different ways to avoid violations. Then, the separate issue arises of whether limits should be automatically updated each year to keep up with inflation.
So, perhaps salary limits should be dropped all together? One common argument against the salary limits initially set in 2016 was that the limits were so high that it made the duties test meaningless. To eliminate the salary limit, employers would need to rely on a duties-only test. This methodology creates its own problems with determining breakdowns of responsibilities. It is a complex task to define what percentage of “non-exempt” duties would be allowed for an employee to remain exempt.
The salary levels have not been updated since 2004, and as such, may not be truly reflective of a suitable standard for 2017. The eleven questions make it clear that the DOL is working to craft an approach that will be more amenable to employers. As for what that solution may be, employers may not have resolution for several months.
For more information on this topic, or to see the full list of rules for comment, please go to https://federalregister.gov/d/2017-15666
Nicole Crump Gallahue, JD, CIC
Director of Employment ADR
EDR Systems
This information is the opinion of the writer and is not meant to be construed as creating an attorney-client relationship or as legal advice to an individual or business. Please consult your attorney if you need legal advice on the issues above.