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The Latest Move in the Overtime Exemption Saga: The DOL's RFI The Latest Move in the Overtime Exemption Saga: The DOL's RFI

The Latest Move in the Overtime Exemption Saga: The DOL's RFI

Changes may be on the horizon for the Fair Labor Standards Act (FLSA) regulations related to overtime exemptions. On Wednesday, July 26, 2017, the Department of Labor (DOL) published a Request for Information (RFI) on potential amendments to the temporarily enjoined FLSA regulations issued in 2016 related to the exemptions from overtime. This action is consistent with the brief filed by the DOL in the appeal of the temporary injunction, in which the DOL stated it would take further steps to determine what the minimum salary threshold should be for the majority of the exemptions from overtime. This action is also consistent with the Executive Order issued by President Donald Trump that asked federal agencies to identify regulations that, among other characteristics, eliminate jobs or inhibit job creation, impose costs that exceed benefits or interfere with regulatory reform initiatives and policies. The RFI is a positive sign for employers who remain concerned about the high salary level set by the regulations issued in 2016. 
The RFI focuses on the salary level that will most effectively identify employees who may be exempt from overtime. The RFI includes 11 more specific questions about the appropriate salary level. These questions address topics like:
  • The appropriate method to update the 2004 salary level ($455 per week) for inflation (if such an update should be made);
  • Whether the regulations should contain multiple salary levels based on an employer's size, location or other characteristics;
  • Whether there should be a different salary level for the different exemptions (executive, administrative and professional);
  • The standards that should be used to set an appropriate salary level;
  • Whether the salary level set by the 2016 regulations ($913 per week) is so high that it effectively eliminates the value of the duties tests that must currently be analyzed if the minimum salary level is met;
  • The changes employers made in anticipation of the effective date of the 2016 regulations and any additional changes made when the temporary injunction was issued by the court;
  • Whether a duties test alone would be preferable to a minimum salary plus duties test;
  • Whether the salary level set in the 2016 regulations excludes traditionally exempt occupations; and
  • The appropriate method for setting and/or updating the annual compensation level for the highly compensated employee exemption.
The DOL will be accepting comments on these topics for a period of 60 days after the publication, or until September 25, 2017. Instructions on how to submit comments are in the RFI, a copy of which can be found here.

While the issuance of an RFI does not guarantee new regulations will be issued, it is a signal we will see changes in the future – how far in the future remains to be seen. As we know from the past, regulatory changes can be very slow moving. In the meantime, employers should keep abreast of the status of the ongoing litigation related to the regulations, including the case in the Fifth Circuit where the appeal of the preliminary injunction is pending (Nevada, et. al. v. U.S. Dep’t of Labor, et. al.) and lawsuits filed on behalf of employees to recover unpaid overtime using the 2016 regulations (one of which is described here).

If you have questions about the RFI, the status of the exemptions from overtime or any other wage and hour issue, please contact Tami A. Earnhart or any other member of our Labor, Employment and Immigration Group

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.
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