DOL Seeks Overtime Comments

March 28, 2019

On March 22, the U.S. Department of Labor (DOL) announced the official publication of the proposed changes to the federal overtime rules. This announcement is significant because it triggers the start of the 60-day period for public comments in favor of and opposed to the rule changes. The comment period will remain open until May 21, after which the DOL will evaluate the comments and decide whether and when to implement any of the changes.

Working in coordination with our coalition partners—the Partnership to Protect Workplace Opportunity—NSBA will be submitting comments on the proposal. According to NSBA members, the new overtime proposal is a middle ground compromise—it avoids being too onerous, while still increasing pay for some. NSBA believes, the proposal is a reasonable improvement from the current threshold, which was last increased in 2004.

The DOL’s proposed overtime rule changes increase the minimum salary that employers must pay certain workers to avoid overtime from $455 per week ($23,660 annually) to $679 per week ($35,308 annually). The proposed rule changes also involve increasing the total annual compensation required for the “highly compensated employee” overtime exemption from $100,000 to $147,414.

The DOL estimates that these changes will make more than one million additional American workers eligible for overtime pay and another 200,000 will see their incomes rise under changes for a smaller category of highly compensated workers who are also covered by overtime rules. Overtime-eligible employees must be paid time-and-a-half for the hours that exceed 40 a week. Many businesses pay overtime to hourly workers but often exempt managers and other salaried employees from the additional pay. The salary threshold is intended to protect workers who may have a manager title but low earnings—less than $455 a week at the current level.

The announcement follows months of speculation in the employment community about an update to overtime requirements, as well as an ill-fated effort by the Obama administration to set an even higher salary threshold of $47,476.

In 2016, a federal judge enjoined the Obama administration’s overtime rule. The appeals process bled into the change in administrations, until the Trump administration’s DOL dropped its defense of the Obama-era rule. But the agency simultaneously asked the 5th U.S. Circuit Court of Appeals to approve the use of a lower threshold because the federal judge who issued the injunction had questioned the legality of any salary threshold whatsoever in his decision.

A complete description of the DOL’s proposed rule changes can be found on the DOL’s web site and anyone interested in submitting comments regarding the proposed rule changes can submit them electronically.

However, it could still take months before the rule is finalized. After the 60-day comment period, the DOL will have to draft a final version of the rule and send it to be the Office of Management and Budget (OMB) for final approval.