Proposed overtime rule has been sent to OMB

Secretary of Labor Thomas Perez announced today that the U.S. Department of Labor has submitted a proposed rule on the white-collar FLSA overtime exemptions to the federal Office of Management and Budget, which means that the proposed revisions to the overtime regulations could be made public before long.

Although the specifics are not known at this time, the proposed rule is expected to make it more difficult for employers to claim that certain salaried workers are exempt from the overtime requirements of the Fair Labor Standards Act. This could happen in two ways: (1) by raising the minimum weekly salary necessary to qualify for an exemption from its current level of $455 a week, or (2) by raising the percentage of time that an employee must spend performing “exempt” job duties before the employee qualifies for the exemption. (Either one of these changes, or both, could be made.)

The proposed rule is in response to a memorandum issued by President Obama on March 13, 2014, directing the Secretary to “update” the current regulations. According to a White House fact sheet issued at the time, the current salary threshold “has failed to keep up with inflation, only being updated twice in the last 40 years and leaving millions of low-paid, salaried workers without these basic protections.”

The salary threshold was last increased in 2004, during the Bush Administration.

We will keep you posted!

Robin Shea is a Partner with the law firm of Constangy, Brooks, Smith & Prophete, LLP and has more than 20 years’ experience in employment litigation, including Title VII and the Age Discrimination in Employment Act, the Americans with Disabilities Act (including the Amendments Act), the Genetic Information Non-Discrimination Act, the Equal Pay Act, and the Family and Medical Leave Act; and class and collective actions under the Fair Labor Standards Act and state wage-hour laws; defense of audits by the Office of Federal Contract Compliance Programs; and labor relations. She conducts training for human resources professionals, management, and employees on a wide variety of topics.

Robin is Editor in Chief of Constangy’s client publications and author of Constangy’s blog Employment & Labor Insider. You can also follow Robin on Twitter @RobinEShea.