New Overtime Pay Rulemaking May Arrive Late

As reported in the Wall Street Journal on November 11, a high-ranking U.S. Department of Labor (USDOL) official recently commented that the USDOL is unlikely to produce a final rule to increase the number of workers eligible for overtime until late 2016 or early 2017. Speaking at a conference in Philadelphia, PA, the Solicitor of Labor Patricia Smith recently commented during a panel discussion that it would be difficult for the USDOL to consider the significant number of public comments on the proposed rule. While the initial expectation was that the rule would be finalized in early 2016, USDOL received over 260,000 public comments. Those comments must be considered and reflected in the final rule when it is released.

As proposed in July 2015, the Department of Labor seeks to increase the salary threshold for workers who are eligible for overtime pay from $455 per week ($23,660 per year) to $970 per week ($50,400 per year). This change will make millions of additional employees across the country eligible for overtime pay and will create pressure on U.S. employers to closely examine all worker compensation plans. The over 260,000 comments on the proposal were over three times as many comments as were received in 2004 when the Department of Labor increased the salary requirement to $455 per week ($23,660 per year) from $155 per week ($8,060 per year) and made changes to the duties tests for determining exempt/non-exempt worker status.

This rulemaking may present significant challenges to the compensation plans of many TIA members. TIA’s Operations Committee monitors developments in Department of Labor regulations, and will report on any new developments for this issue. Additionally, the TIA Fair Labor Standards Act (FLSA) Framework will be updated to give members the best possible resource to ensure compliance with the law. For additional information please contact Will Sehestedt at or 703-299-5713.