Department of Labor Issues Overtime Regulations

The Department of Labor’s Wage and Hour Division (DOL) published its proposed rule that amends the regulations under the Fair Labor Standards Act (FLSA) governing the “white collar” exemption from overtime pay for executive, administrative and professional employees.

The proposed rule from DOL:

  • would double the salary threshold for employees who are eligible to receive overtime pay, from $23,660 to $50,440. This salary threshold will also be updated every year in the Federal Register.
  • does not propose regulatory changes to the duties tests, which require employees to perform certain primary duties to qualify for an overtime exemption.  However, DOL is seeking feedback on whether these duties tests should be revised.

 

DOL estimates that this rule would:

  • directly affect 4.6 million workers in the U.S, and total direct employer costs for Year 1 are estimated to equal $592.7 million dollars.  
  • cost each small business, on average depending on the number of workers covered by the regulation, $100 to $600 in direct costs and $320 to $2,700 in additional payroll costs to employees in the first year after the promulgation of the proposed rule. 
  • cause each small business to spend one hour of time for regulatory familiarization; one hour per each affected worker in adjustment costs; and five minutes per week scheduling and monitoring each worker expected to be classified as overtime eligible as a result of the proposed rule. 

 

Advocacy is seeking feedback on the numbers and types of small businesses affected by this rulemaking, the compliance costs of this rule to these small businesses, and any significant regulatory alternatives that may minimize the impacts of this rule.

Comments are due to DOL on September 4, 2015.   

Date: 
Tuesday, July 7, 2015