DOL not expected to Publish Overtime Final Rule Until Mid to Late 2016.

Benefits Insights, Winter 2016

This fall, the Office of Management and Budget (OMB) noted that the U.S. Department of Labor (DOL) does 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 it won’t be until late 2016 that the final rule revision is released. In June 2015, the DOL published a Notice of Proposed Rulemaking (NPRM) that included such key provisions as:

  • 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.

With the final rule not expected until this summer or possibly later, the time between final rule publication and its effective date could be quite brief because the rule applies to the 2016 calendar year. Solicitor of Labor Smith also said the agency would give employers just 60 days to comply with the final rule.

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

DOL not expected to Publish Overtime Final Rule Until Mid to Late 2016