Salary Graph Shows Increase In Work Earnings

As previously reported by HR Legalist, the Department of Labor (“DOL”) has proposed an amendment to the Fair Labor Standards Act (“FLSA”) that will change the rules about which employees are exempt from overtime for working over 40 hours per week.  The biggest potential game changer is an increase in the salary threshold – causing millions of employees who are currently exempt from overtime to be entitled to “time-and-a-half” for the first time.  Under the new rules, the salary threshold may automatically change each year depending upon inflation or a percentage of the average national wage.

The terms of the proposed rule were made public in June of 2015. However, as is often the case with federal agency rules, there was no strict timetable for when it would take effect.  However, yesterday the DOL sent the final rule to the White House Office of Management and Budget (“OMB”) for review.  OMB usually takes 30 to 60 days to review agency rulemaking (last year, OMB finished its review of the proposed rule in about 60 days).  This means that the final rule may be published in April or May.

The specifics of the final rule aren’t publicly available until OMB review is complete. At that point, Congress will have 60 days to review the rules before they will take effect.  The final rule could vary somewhat from the preliminary version that was released last summer, but it’s a safe bet that it will require many businesses to change how they classify which employees are “exempt” and “non-exempt” from overtime.  HR Legalist will continue to keep an eye on this new rule and how it will impact employers.


Ivo Becica- 3394Ivo Becica focuses his practice on advising employers on how to reduce litigation risk and resolve employee issues, and on defending employers in litigation if necessary. He can be reached at 215-667-6335 or ivo.becica@obermayer.com