DOL issues final rule on overtime regulations

Provided by Partnership to Protect Workplace Opportunity 

The Department of Labor (DOL) has issued its final rule altering the overtime regulations under the Fair Labor Standards Act.  

In this final rule, the DOL is setting compensation thresholds for the standard test and the highly compensated employee test that will work effectively with the respective duties tests to better identify who is employed in a bona fide EAP capacity for purposes of determining exemption status under the Act. 

Specifically, the Department is setting the standard salary level at the 35th percentile of weekly earnings of full-time salaried workers in the lowest-wage Census Region ($1,128 per week or $58,656 annually for a full-year worker) and the highly compensated employee total annual compensation threshold at the annualized weekly earnings of the 85th percentile of full-time salaried workers nationally ($151,164). 

The final rule also implements automatic updates to both the minimum salary threshold and the HCE threshold, both of which will be increased every three years. 

Employer organizations are considering litigation challenging the rule, but this phased-in implementation will likely impact how litigation is both pursued and decided over the next six months. 

The Partnership to Protect Workplace Opportunity (PPWO) issued a statement expressing disappointment DOL’s decision. PPWO plans to circulate a sign on letter in the coming week to request that DOL extend the July 1 implementation date to Sept. 1. The OSCPA is a member organization in the PPWO and supports the delay in implementation.