The Wall Street Journal is reporting that the Department of Labor’s new overtime regulations are not likely to be final and implemented until late 2016. As we discussed in prior posts, in June of this year the DOL proposed regulations that would significantly increase the salary basis test for most FLSA exemptions. The proposed change would make several million more employees eligible for overtime payments, which could have a significant impact on an employer’s bottom line. Many commentators and employers were anticipating the new regulations would go into effect either late this year or early 2016. According to the WSJ report, however, the DOL’s Solicitor of Labor, Patricia Smith, recently commented at a labor and employment law conference that the new regulations are not likely to be final before late 2016. According to the report, Ms. Smith noted the DOL received approximately 270,000 comments in response to the proposed regulations and that this, along with the complex nature of the changes, warranted additional time to complete the regulations.
While this is good news for employers, institutions should continue to prepare for the anticipated changes. An increase on the salary basis test for most FLSA exemptions will mean employers will need to carefully evaluate their currently exempt employees to determine which, if any, will be impacted by the new regulations. If an exempt employee does not meet the anticipated salary threshold, you should consider whether the anticipated financial impact will be greater by raising the salary of the employee to meet the new exempt standard or by allowing the employee to be eligible for overtime and more closely managing worked hours. Additionally, the increased salary required for FLSA exemptions will likely result in increased liability for misclassification of exempt employees. Accordingly, employers should take this opportunity to review FLSA exemption classifications to ensure exempt employees actually qualify for the FLSA exemption at issue.