25 October 2018 US Department of Labor delays release of proposed overtime regulation changes until March 2019 The US Department of Labor (DOL) announced that it now plans to release proposed changes to its federal overtime regulations by March 2019, a delay from its earlier goal of October 2018. As we previously reported, on July 25, 2017, the DOL announced that it published a request for Information (RFI) pursuant to the overtime exemption for salaried employees under the Fair Labor Standards Act (FLSA). The intent of the RFI was to allow the public to provide information that would potentially be used in issuing proposed regulations. (EY Payroll Newsflash Vol. 18, #132, 7-27-2017.) Specifically, the RFI requested feedback concerning the salary-level test, the duties test, varying cost-of-living across different parts of the US, inclusion of non-discretionary bonuses and incentive payments to satisfy a portion of the salary level, the salary test for highly-compensated employees, and automatic updating of the salary level tests.? As we previously reported, on May 18, 2016, the DOL issued final revised regulations governing the exemption from overtime pay that applies to qualified exempt employees. The new requirements were to take effect December 1, 2016, and were expected to have the result of extending overtime pay to 4.2 million exempt employees and boost wages by $12 billion over the following 10 years. (Email from then-President Obama, May 17, 2016.) (EY Payroll Newsflash Vol. 17, #077, 5-19-2016.) Under the final rule, the salary threshold for salaried-exempt employees would have been $913 per week ($47,476 per year), double the current amount. This salary test would have been adjusted for inflation every three years, and was expected to rise to $981 per week ($51,000 per year) when first updated on January 1, 2020. On November 22, 2016, a federal judge in Texas put a hold on the federal overtime rule. (EY Payroll Newsflashes Vol. 17, #200, 11-23-2016, #206, 12-6-2016.) After three extension requests, the DOL filed its reply brief with the U.S. Court of Appeals for the Fifth Circuit on June 30, 2017. In that brief the court was urged to rule that the U.S. Department of Labor has authority to set a salary level pursuant to the white collar exemption of the FLSA and to reverse the temporary injunction issued last November. Within the brief, the DOL also stated that it will not defend the revised salary level of $913 included in the Obama Administration's regulations, but instead plans to determine a more appropriate salary threshold to be included in future rule making. On August 31, 2017, U.S. District Court Judge Amos Mazzant granted summary judgment against the Department of Labor in consolidated cases challenging the Overtime Final Rule. The court held that the Final Rule's salary level exceeded the Department's authority, and concluded that the Final Rule is invalid. On October 30, 2017, the Department of Justice, on behalf of the DOL, appealed the district court's decision to the U.S. Court of Appeals for the Fifth Circuit. On November 6, 2017, the Fifth Circuit granted the government's motion to hold the appeal in abeyance while the DOL undertook further rulemaking to determine what the salary level should be. (Final rule — overtime, DOL website.) During his March 2017 confirmation hearings, Labor Secretary Alexander Acosta stated that he felt the minimum salary threshold, accounting for inflation adjustments since 2004, should be "somewhere around $33,000, give or take."
Document ID: 2018-2131 | |||||||||
