DOL plans May release for new overtime threshold

Dive Brief:

• The U.S. Department of Labor has again extended its timeline for proposing a new salary threshold for overtime eligibility, this time to May, according to the agency’s latest regulatory agenda, published this week.
• The Notice of Proposed Rulemaking was originally slated for April 2022 but then delayed to October of that year. The May goal represents a second delay.
• According to DOL’s agenda, the proposed rule will update the salary level at which many workers become exempt from the Fair Labor Standards Act’s minimum wage and overtime requirements. Once proposed, stakeholders will have an opportunity to comment before the agency finalizes its rule.

Dive Insight:

Once a sleepy area of employment law, the FLSA’s regulations took the spotlight when the Obama administration announced its intent to update the rules’ floor for overtime eligibility. Employees paid below that figure must receive time-and-one-half their regular rate of pay when they work more than 40 hours in a workweek.

That salary threshold had been set at $23,600 ($455 per week) since 2004, and DOL sent shockwaves through the employment community when it proposed — and finalized — a rule to more than double that number, upping the threshold to $47,476 threshold ($913 per week).

The move would have entitled millions more employees to overtime pay, economists estimated, but it was halted when a federal judge enjoined the rule just days before it was set to take effect. Shortly thereafter, President Donald Trump took office and DOL abandoned its defense of the rule.

Trump’s DOL then revisited the threshold, agreeing that an increase was needed, but one far below the rate Democrats had planned. The agency ultimately proposed and successfully implemented a $35,568 threshold.

Another increase has long been on the Biden administration’s agenda, but it has not said what dollar figure it has in mind. In 2021, four congressional Democrats argued for a threshold in line with the “historical high point of salary thresholds — the 55th percentile of earning of full-time salaried workers nationwide.” That would have resulted in a threshold of $82,732 by 2026, the letter said.