The long-anticipated proposed rule to update overtime regulations has arrived at the White House and is pending review, the White House Office of Management and Budget said on its website last week, signaling that a new overtime proposal is nearing release.
The announcement that the rule is pending review is significant, as it’s one of the first new developments on the overtime rule in a while. The U.S. Department of Labor’s (DOL’s) plan to update overtime regulations under the Fair Labor Standards Act has experienced several delays in recent months. The DOL has been announcing the release of a proposed overtime rule since last fall, but nearly a year later, no new rule has been introduced.
The DOL most recently announced in the spring regulatory agenda that it would issue the proposed overtime rule in August.
The current overtime threshold for white-collar exemptions sits at $35,568 per year, a figure set by the Trump administration in 2019. That threshold was much lower than what the Obama administration’s 2016 overtime rule set it as—$47,476—but a federal court in Texas held Obama’s rule to be an invalid extension of executive authority.
Robert Boonin, an attorney with Dykema in Ann Arbor, Mich., said at the SHRM Annual Conference & Expo 2023 in Las Vegas on June 12 that he thinks the DOL may be planning more aggressive changes with the new rule than in its previous revisions. It’s possible the department is contemplating including other provisions in the proposed rule besides a one-time increase in the salary level test, such as taking the controversial step of adding periodic indexed adjustments to the salary level rather than going through rulemaking to raise the salary level. It might also change the duties test, he said.
Boonin said the anticipated rule has been in a holding pattern while Congress considers leadership nominations for the DOL. President Joe Biden nominated Julie Su, acting secretary of labor, for labor secretary in February, but Su’s nomination has been stalled in the Senate.
For its part, SHRM said it is closely watching overtime developments and supports reasonable increases and updates to the overtime salary threshold to “ensure that HR professionals and employers can classify employees with certainty and offer flexible schedules,” said Emily M. Dickens, chief of staff, head of public affairs and corporate secretary for SHRM.
“We support a single standard salary threshold that considers the location, size and industry of employers rather than multiple thresholds,” she said. “We look forward to reviewing the Department of Labor’s proposal and as the voice of all things work, will remain engaged on this important workplace issue.”
