In March, the Department of Labor (DOL) moved another step forward with the controversial requirement that all exempt employees be paid at least $50,440 annually in order to be entitled to the exemption. As background, on July 6, 2015, the DOL published a Notice of Proposed Rulemaking to update the regulations defining and delimiting the exemptions for so-called “white collar” employees under the Fair Labor Standards Act. The proposed rule would increase the salary threshold for exempt workers from the current $23,660 to $50,440 annually, an increase of more than 50 percent. After that, the threshold would be automatically adjusted annually to insure that it continues to provide what the DOL described as a useful and effective test for the exemption.
Having completed the notice and comment period, the next step was for the Department of Labor to send the final version of the regulations to the White House Office of Management and Budget (OMB) for review. On March 14, 2016, the DOL submitted the regulations to OMB, bringing the rule one step closer to fruition. The OMB review period typically can last up to 90 days, but can be extended by either DOL or OMB. However, the 90-day period ending in mid-June is consistent with many experts’ prediction of an effective date early in the third quarter. Once the OMB gives its approval, the DOL is free to publish a final rule.
The timing of the final overtime rule’s publication could be critical in this election year. After the final regulation is published, the Congressional Review Act allows Congress 60 legislative days to review the regulation and enact a disapproval motion. A rule published with fewer than 60 legislative days remaining in the Congressional session could carry over to a new president, who may or may not be willing to agree with Congress’ action.