In June 2015, the Department of Labor (DOL) published proposed rules amending the minimum salary requirements for overtime exemptions under the Fair Labor Standards Act (FLSA). Among the proposed rules are a significant increase in the minimum weekly salary for FLSA white-collar exemptions from $455 per week ($23,660 annually) to $970 per week ($50,440 annually), as well as a mechanism for automatically updating the minimum salary and compensation levels on an annual basis as discussed in more detail in our prior alert.
On March 14, 2016, the DOL sent its final overtime rules to the White House's Office of Management and Budget (OMB), which is the last step before the rules can become effective. The OMB generally reviews such rules within 30 to 90 days. After receiving approval from the OMB, the DOL will publish the final rules in the Federal Register, which will be followed by a 60-day period before the rules become effective on employers.
Details of the final rules have not been released, and so we do not know whether the DOL has revised its proposed rules in any significant way, such as by making the duties tests more difficult to pass as has been speculated. Based on the current timeline, employers should have the final rules by May or June and, if so, the compliance deadline will be in August or September. Employers can take steps now to prepare for and implement the rules’ anticipated changes, including by evaluating employees who are treated as overtime exempt and who earn less than $50,440 annually, and/or whose duties may fall short of the current duties tests.