Whatever Happened to Those New Overtime Rules?

The Business Case for Expungement
August 7, 2017
The Friday 5
August 11, 2017

Whatever Happened to Those New Overtime Rules?

The Takeaway:

The Labor Department has re-opened comments on the Obama Administration’s federal overtime rules.



The answer is they’re still hanging on, but the Department of Labor under the Trump Administration is likely to revise or rescind them.

In the last days of his administration, President Obama enacted a number of regulation changes to fulfill any outlying promises left on his agenda, one of which was changes to the Fair Labor Standards Act (FLSA). The news rules more than doubled – from $23,660 to $47,476 – the minimum salary at which you have to pay salaried employees overtime beyond their 40-hour work week. There were also changes made to the “skills” test included in the Fair Labor Standards Act, as to what qualifies an employee to be exempt from these rules. The regulatory changes were handed down from the Department of Labor in March 2016, and businesses had untill December 2016 to comply – just eight months.

The outcry from the business community was swift and loud, as business owners and human resources managers scrambled to figure out how they would comply with an overhaul of the overtime laws in such a short time. Many began working to draft new protocols and plans such as making non-exempt employees clock hours, demoting some full-time employees to part-time, changing job descriptions to make them exempt, or giving some employees raises to push them over the threshold of exempt.

However, the future of these new rules became less certain after the November 8th election, and they came to a complete halt on November 22nd when a Texas federal judge issued a preliminary nationwide injunction for all employers, blocking the Department of Labor from implementing the new rules.

While the new rules continue to be held up by the courts, the Department of Labor announced last week that they will re-open public comments on the new overtime rules. In its initial public comment period under the Obama administration, the Department of Labor reviewed more than 300,000 comments. The Department has said they did not agree with the $47,000 threshold advocated for by the Obama administration, but that they will consider treating workers differently based on region and industry and not just salary. The $47,000 threshold was disproportionately burdensome in portions of the country with lower costs of living, like here in South Carolina. Labor Secretary Alexander Acosta has said that while changes do need to be made, the Obama administration’s sweeping changes were “a shock to the system.”

For now, it would be wise for business to carry on with any changes that they put in place before the court stay, or continue to make plans if the rule stays in place. The public comment period will be open for sixty days, and you can submit your comments here. We at the Chamber will continue to weigh-in and keep an eye on any progression with these rules.

Comment on this proposed rule here.