Last year, President Obama ordered the Department of Labor (DOL) to “update” and “simplify” the existing regulations governing overtime and the classification of exempt and non-exempt employees. Recently, Secretary of Labor Thomas Perez published a blog post stating, in part, “We’ve worked diligently over the last year to develop a proposed rule that answers the President’s directive and captures input from a diverse range of stakeholders. After extensive research, study and careful analysis, we have submitted the proposed rule to the Office of Management and Budget for review. In the near future, the public will have an opportunity to weigh in and help us craft a final rule.” Once the OMB has reviewed the proposed rules, they will be released for public comment. Based on past experience with this process, the new Overtime regulations will probably be published in the fall, or maybe as late as early 2016.
In light of the blog post also stating the DOL’s position that the “rules governing who is eligible for overtime have eroded over the years…[resulting in] millions of salaried workers hav[ing] been left without the guarantee of time and a half pay,” it is likely that the proposed rules will make it easier for employees now classified as exempt to be re-classified as non-exempt, making them eligible for overtime. Interestingly, Secretary Perez also wrote in his blog that the national minimum wage should be raised, and that the minimum wage floor should rise each year “so that its purchasing power doesn’t erode with time.” I would recommend reading the entire blog post (it is not too long) which concludes with this from Secretary Perez: “Minimum wage and overtime – they’re about rewarding hard work, and ensuring that the economy works for everyone and creates broadly-shared prosperity.” It is anticipated that the new regulations will raise the minimum salary level for exempt employees from the current $23,660 to an amount between $42,000 and $50,000, and impose a “bright-line” duties test.