Trump Administration Issues Anticipated Proposed Overtime Rule

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The US Department of Labor released a long-anticipated notice of proposed rulemaking containing changes to overtime pay regulations; the proposal comes nearly two years after a federal court permanently enjoined an Obama-era regulation on the same topic.

The Wage and Hour Division of the US Department of Labor (DOL) published a notice of proposed rulemaking (NPRM) on March 22, 2019, that includes changes to the Fair Labor Standards Act (FLSA) federal overtime pay regulations. The NPRM proposes to update pay requirements specific to exemptions for executive, administrative, and professional ("white collar") employees by raising the salary threshold specific to this exemption to $679 per week or $35,308 annually.

Federal law affords employees overtime pay at the rate of one-and-a-half times their normal hourly rate for all hours worked over forty (40) in a given workweek. There are exemptions to this requirement, however, such as the white-collar exemption. In order to qualify for this exemption, an employee must (1) be paid on a salary basis, (2) be paid at least the minimum salary threshold set by the department, and (3) have primary responsibilities consistent with executive, administrative, or professional positions as defined by DOL (known as the primary duties test). The NPRM proposes to increase the minimum salary threshold an employee must be paid under this exemption from $23,660 per year ($455 per week) to $35,308 per year ($679 per week). Additionally, DOL requests comment on whether regulations should require an update to the salary threshold every four years via notice and comment rulemaking.

The Obama Administration issued its own finalized overtime regulation in 2016; under that rule, the minimum salary threshold was increased to $47,476 per year and DOL adopted a mechanism for automatically increasing the salary threshold every three years. In September of the following year, a federal court struck down the Obama-era rule on the basis that DOL exceed its statutory authority in increasing the salary threshold by such an extent. The current proposal differs from the Obama regulation in that the minimum salary threshold is roughly $12,000 lower and the proposal does not include an automatic update provision.

For more information on the current NPRM, as well as background on the overtime regulations generally, please visit CUPA-HR's website for a recent blog post on the topic. EDUCAUSE will be working with CUPA-HR as it submits comments in response to the NPRM that reflect the higher education community's viewpoints.

Kathryn Branson is an associate with Ulman Public Policy.

© 2019 Kathryn Branson. The text of this work is licensed under a Creative Commons BY-NC-ND 4.0 International License.