New FLSA Overtime Pay Rules May Be Coming Later Than Anticipated

Last week, The Wall Street Journal reported that new regulations designed to greatly expand the number of employees entitled to overtime pay may be significantly delayed. As we described in our earlier blog posts, the primary proposal is to raise the salary threshold for exempt white-collar employees from $455 per week to $970 per week, or $50,440 per year.

The WSJ cited comments made by U.S. Solicitor of Labor Patricia Smith during a panel discussion at the American Bar Association’s Labor and Employment Law Conference in Philadelphia on Thursday, November 5. 

According to the WSJ, Smith said the final rules on overtime eligibility are not likely to be published before late 2016. With the comment period having closed on September 4, most employers expected final rules to be published and go into effect late this year or during the first quarter of 2016. According to Smith, additional time is needed to digest and react to the more than 270,000 written comments submitted on the proposed changes.

Under the Administrative Procedure Act, the public must be given a minimum of 30 full days’ written notice before a published final rule may go into effect. The next President of the United States will be sworn in on Friday, January 20, 2017. Accordingly, the DOL must publish its last final rules in the Federal Register on or before Wednesday, December 21, 2016, so that any such rules have 30 days during which to become legally effective. Otherwise, a new president upon taking office could stay any final rules that had not yet been published for 30 full days.

Employers have been preparing for new rules that will increase the number of workers eligible for overtime pay. Although we cannot know when the final rule will be published, if Solicitor of Labor Smith’s comments are credited, employers appear to have more time than they thought.  Nyemaster Goode’s Labor & Employment practice group will continue to monitor this significant development.