The U.S. Department of Labor’s (DOL) Wage and Hour Division just delivered its proposed final revisions to the Fair Labor Standards Act’s (FLSA) Part 541 overtime regulations to the Office of Information and Regulatory Affairs (OIRA) of the Office of Management and Budget. OIRA review of this proposed final rule is required under Executive Order 12866 since the Department’s proposal is “economically significant” in that its annual impact on the economy would be $100 million or more. OIRA review generally takes 30 days, but that time can be extended.
Based on the DOL’s regulatory proposal, the final regulations likely will more than double the minimum salary requirement that is needed to qualify for the executive, administrative, and professional exemptions to the FLSA’s overtime and minimum wage requirements. Annual indexing of the salary threshold also is anticipated. The larger unknown question is whether the DOL will modify the duties test, given that the department asked several questions about the adequacy of the current duties test and its position that many exempt employees perform too much nonexempt work.
Previously, the DOL had stated that its final revisions to these regulations would be published in July of 2016. However, the delivery of the proposed final revisions to OIRA now means that publication could occur sooner, possibly in April or May of 2016. This push by the DOL to publish a final rule before July of 2016 may be an indication that the Obama administration wants to be in a position to veto any possible resolution that Congress may pass under the Congressional Review Act (CRA). Under the CRA, Congress has 60 legislative days from receipt of a final rule to pass a resolution disapproving the final rule and preventing it from going into effect. Congress may initiate a CRA disapproval motion as a strategy to delay or outright block a final rule. The final regulations will have an effective date of at least 60 days after publication.
Interestingly, U.S. Secretary of Labor Thomas Perez will be testifying at a hearing conducted by the House Committee on Education and the Workforce on Wednesday, March 16, 2016. Secretary Perez surely will be questioned about the DOL’s overtime regulations at the hearing, and we will be posting additional information based on his testimony.