Comment Period Begins for OT Rule

The Department of Labor is expected to publish today in the Federal Register its anticipated Request for Information on its overtime rule.

As you may recall, the rule was blocked last November by a Texas federal judge before it would have expanded overtime protections to over 4 million workers, by more than doubling the annual salary level at which workers must be compensated for overtime pay, from $23,660 to $47,476. There will be a 60-day public comment period following tomorrow’s Request for Information.

Seyfarth Shaw attorney Alexander Passantino, former acting administrator of the Labor Department’s wage and hour division, and current partner in the D.C. office of the firm, writes in a blog post that the issues the DOL seeks comment on include whether the 2004 salary test should be updated based on inflation, and if so, which measure of inflation; whether duties test changes would be necessary if the increase was based on inflation; and other questions.

The issues on which the Department seeks comment, according to Passantino’s post, are:

  • Should the 2004 salary test be updated based on inflation? If so, which measure of inflation?
  • Would duties test changes be necessary if the increase was based on inflation?
  • Should there be multiple salary levels in the regulations? Would differences in salary level based on employer size or locality be useful and/or viable?
  • Should the Department return to its pre-2004 standard of having different salary levels based on whether the exemption asserted was the executive/administrative vs. the professional?
  • Is the appropriate salary level based on the pre-2004 short test, the pre-2004 long test, or something different? Regardless of answer, would changes to the duties test be necessary to properly “line up” the exemption with the salary level?
  • Was the salary level set in 2016 so high as to effectively supplant the duties test? At what level does that happen?
  • What was the impact of the 2016 rule? Did employers make changes in anticipation of the rule? Were there salary increases, hourly rate changes, reductions in schedule, changes in policy?  Did the injunction change that? Did employers revert back when the injunction was issued?
  • Would a duties-only test be preferable to the current model?
  • Were there specific industries/positions impacted? Which ones?
  • What about the 2016 provision that would permit up to 10% of the salary level to be satisfied with bonuses? Should the Department keep that? Is 10% the right amount?
  • Should the highly compensated employee exemption salary level be indexed/how? Should it differ based on locality/employer size?
  • Should the salary levels be automatically updated? If so, how?

“Of course, the value of these responses ultimately is dependent on the Fifth Circuit’s decision on whether the salary test is permissible to begin with,” Passantino writes. “Should the Fifth Circuit rule in the Department’s favor on that issue, the RFI responses will provide the Department with the information it needs to proceed on a new rulemaking adjusting the salary level . . .  assuming the employer community responds.”