The DOL’s action on this provision of the FLSA initially dates back to the Obama Administration. On May 23, 2016, the DOL released a Final Overtime Rule with an effective date of December 1, 2016. The 2016 Final Overtime Rule would have, among several other changes, raised the weekly salary level exempting certain white-collar employees from $455 per week to $913 per week. However, before the 2016 Final Overtime Rule took effect, it was challenged and temporarily blocked by a federal district court.
With the change in administrations, challenges to the injunction blocking the 2016 Final Overtime Rule were halted as the Trump Administration stated that it wanted to review the overtime regulations. Consistent with this, the DOL stated in the RFI that in light of “Executive Order 13777 (signed by President Donald Trump on February 24, 2017), the Department is reviewing the impact of the 2016 Final [Overtime] Rule’s changes to the part 541 regulations with a focus on lowering regulatory burden.”
The RFI poses 11 questions to the public seeking comments, information, and data around the following:
- Whether updating the salary level for inflation is appropriate and, if so, what measure of inflation should be used;
- Should the regulations contain multiple salary levels that account for cost-of-living across the United States, or based upon particular regions or industries;
- Whether and to what extent employers made changes to comply with the 2016 Final Overtime Rule; and
- The interaction between the salary level and the duties test and whether there should be any changes to the duties test.
From the questions raised and statements made by the DOL, it appears that it may be considering a more complex solution that factors in variations across the country and industries while, at the same time, trying to eliminate regulatory “burden.”
Kastner Westman & Wilkins will monitor DOL’s action on this issue and communicate any developments. In the meantime, employers are not required to comply with the 2016 Final Overtime Rule. Until further action, the minimum salary threshold for the white-collar exemptions will remain where it has been since 2004, at $455 per week. The salary threshold for the highly compensated employee exemption will remain at $100,000 per year.