DOL Isn’t Expected to Publish Overtime Final Rule Until Summer 2016.

Benefits Insights, Spring 2016

The Office of Management and Budget (OMB) indicated last fall that the U.S. Department of Labor (DOL) did not expect to issue the final rule implementing changes to overtime pay until July 2016. This came out shortly after Patricia Smith, Solicitor of Labor, announced that the final rule wont be released until late 2016.

The DOL published a Notice of Proposed Rulemaking (NPRM) in June 2015 that included:

  • Setting the standard salary level required for exemption at the 40th percentile of weekly earnings for full-time salaried workers (projected to be $970 per week, or $50,440 annually, in 2016)
  • Increasing the total annual compensation requirement needed to exempt highly compensated employees to the annualized value of the 90th percentile of weekly earnings of full-time salaried workers ($122,148 annually)
  • Establishing a mechanism for automatically updating the salary and compensation levels to ensure they will continue to provide a useful and effective test for exemption. Interested parties had until September 4, 2015 to submit written comments on the proposed rule. The DOL reported that it received more than 260,000 comments during that period.

Although the final rule is not expected until this summer or possibly later, the time between final rule publication and its effective date could be quite brief. Smith said the agency would give employers just 60 days to comply with the changes.

Employers should take the opportunity now to prepare for the changes that this rule may bring, especially for the likelihood that the number of employees eligible for overtime pay will increase.

DOL Isn’t Expected to Publish Overtime Final Rule Until Summer 2016