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DOL Announces Plans to Revisit Overtime Rule

Friday, June 1, 2018

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The Department of Labor recently announced its latest regulatory agenda, in which it discussed plans to revisit the overtime eligibility threshold, as well as calculations for regular rate of pay.

Pay Rate

The DOL noted that it plans to “clarify, update and define regular rate requirements” under the Fair Labor Standards Act, which notes that employers must pay covered employees at least one-and-a-half times their regular rate of pay in hours that are in excess of 40 hours in a workweek.

Ed Brown / Wikimedia Commons

The Department of Labor recently announced its latest regulatory agenda, in which it discussed plans to revisit the overtime eligibility threshold, as well as calculations for regular rate of pay.

Bloomberg spoke with several analysts who took a guess at what exactly the DOL might clarify, since this agenda item had not been discussed publicly prior to this announcement.

“When do you have to pay overtime on prizes, awards, bonuses? That might be the number one question I get,” said Tammy McCutchen, an attorney with management-side firm Littler Mendelson. “There’s a lot of confusion.”

A DOL spokesperson added that regular rate regulations have not been updated “in decades,” though compensation practices have evolved throughout the years. On way in which the DOL could clarify the FLSA is to add categories of compensation that are excluded from the regular rate, officials said.

That Notice of Proposed Rulemaking is slated for September.

Overtime Eligibility

The other main agenda item was expected, as it will look at replacing the Obama-era salary threshold hike for those eligible for overtime.

© iStock.com / kadmy

A DOL spokesperson added that regular rate regulations have not been updated “in decades,” though compensation practices have evolved throughout the years.

That regulation proposed a hike from the $455 per week ($23,660 per year) salary threshold to $913, or $47,476 per year, making about 4.2 million more workers eligible to receive overtime pay. This was supposed to take effect in December of 2016, but groups and organizations from 21 states sought to block the rule in U.S. District Court.

The court ruled that the increase in salary level conflicted with the statute and rendered it invalid. However, not only did the DOL file an appeal to the decision in the U.S. Court of Appeals for the Fifth Circuit, it also filed a motion asking the Fifth Circuit to stay the appeal, effectively pushing pause on anything that has to do with the overtime hike as the DOL works through its agenda under the new administration.

The latest announcement puts a January 2019 date on any new overtime regulations.

   

Tagged categories: Department of Labor; Finance; Government

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