I first want to highlight the background of the overtime rule, from 2016 through current day. In November 2016, a district court in Texas blocked the overtime rule put forth under the Obama administration. It was scheduled to raise the salary threshold from $23,600 to $47,476 on December 1, 2016. Moving to current day, under the Trump administration, the decision was appealed, to better understand and determine the Department of Labor’s authority in setting salary thresholds. The 2016 ruling is currently moving (slowly) through the litigation process. However, the Department of Labor has suggested new and more complex alternatives to the salary threshold and overtime rule(s).
Below 4 on the DOL’s Overtime Suggestions:
- Request for Information: On July 26, 2017, the Department of Labor issued a request for information (RFI) during the overtime rule making process. “The use of an RFI in the rule making process is optional but the DOL chose this option rather than immediately publishing a proposed rule in light of pending litigation over the 2016 overtime rule.”[i] The RFI was published in the Federal Register and comments will be public record.
- Cost-of-Living-Based Salary Test: This is comparable to what we have seen with minimum wage levels and exempt/non-exempt weekly rates, throughout New York City and New York State. The suggested rates would vary based location and cost of living, a varying scale of exempt and non-exempt rates. Living in Washington D.C. costs more than living in the rural south. There will be significant challenges with this option, employees that travel, working in more than one location in different areas of the country.
- Litigation and Other Threshold Proposals: Continue to watch for any rulings in the current court proceedings on the Department of Labor’s authority in setting salary thresholds. Also, we could see multiple proposals throughout this process on overtime and salary thresholds, under the new administration.
- New York State Regulations: Regardless of changes made at the federal level, we will see changes in the minimum wage rate and exempt/non-exempt rates on January 1, 2018. Exempt and non-exempt for the specific executive and administrative classifications. Both increases/changes will vary by region, throughout the state.
The laws, regulations and salary thresholds will continue to evolve, through the litigation process by the Department of Labor, request for information proposal and rule making process under the new administration. Ensure that your organization is compliant with state and federal laws regarding exempt, non-exempt and salaried non-exempt statuses. There are duties tests to assist employers in determining overtime eligibility, published by the federal government. If you are confused, seek guidance. Certain positions can be confusing and determinations are complex.
– Matthew Burr, HR Consultant