By: Laurie A. Petersen and Samantha J. Wood
Employers continue to question when the Department of Labor (“DOL”) will finalize the changes to the Fair Labor Standard Act’s overtime regulations. Because the comment period ended on September 4, 2015, it was previously expected that the DOL would issue a final rule in early 2016.
However, last month at a Labor and Employment Law Conference, the Solicitor of Labor, M. Patricia Smith, stated that the DOL likely will not issue its final rule until late 2016. This is because the DOL must sift through approximately 270,000 comments that it received during the proposed rule’s commentary period (three times the amount of comments received in 2004 when the overtime rules were last updated).
Because the estimated timing of the final rule may coincide with the 2016 election, political commentators have suggested that the election may have an effect on the rulemaking process. For instance, if the proposed rule is implemented just prior to the election, it may be used as a campaign platform. Because of the uncertainties of an election, the current administration may impose a very short window of time for the rule to take effect (30-60 days) to ensure the rule is not reversed by the next administration. If the rule is not finalized or effective prior to a new administration, it is possible that the rule could be delayed or substantially changed.
Irrespective of the possible effects the election may have on the final rule, employers should plan and develop a strategy in the event the proposed rule will takes effect in Q3 or 4 of 2016. In their 2016 planning strategies and budget considerations, employers should analyze which employees will and will not be affected by the proposed changes, and should determine the appropriate steps to ready compliance should the rule take effect. Employers may choose to increase employee salaries to meet the new salary level threshold (estimated to be $970/week) or may reclassify employees from exempt to non-exempt. If the employer chooses to reclassify its employees from exempt to non-exempt, it will also need to consider the impact of overtime pay, the impact on employee morale, options to avoid overtime pay (such as hire additional staff), and implementation and communication of time-keeping policies.
If you have questions about this material, please contact Laurie A. Petersen or Samantha J. Wood by email at firstname.lastname@example.org or email@example.com, or any other attorney you have been working with here at Lindner & Marsack, S.C.