July 27, 2017Client Alert

DOL Issues Information Request Regarding Overtime Regulations

The Department of Labor (DOL) announced on July 26, 2017, that it is requesting information from the public regarding 29 CFR part 541, which includes the regulations that define and delimit the Fair Labor Standards Act’s (FLSA's) overtime exemptions for executive, administrative, and professional employees. The purpose of the DOL’s request is to gather information to aid it in formulating a proposal to revise these regulations.

The DOL’s announcement is closely connected to the ongoing saga related to the Obama-era overtime Final Rule, which a federal judge sitting in the Eastern District of Texas enjoined on November 22, 2016. In that case, the district court concluded, among other things, that the DOL did not have authority to use a salary-level requirement in determining exempt status and issued a nationwide injunction blocking the proposed minimum salary level of $47,476. That decision is currently on appeal before the United States Court of Appeals for the Fifth Circuit.

After numerous requests for extensions of time, the DOL filed its final brief with the Court of Appeals on June 30, 2017. In its brief, the DOL argued that it had the authority to set a salary threshold as a requirement for exempt status, but in a departure from the prior administration, stated that it “has decided not to advocate for the specific salary level ($913 per week) set in the final rule at this time and intends to undertake further rulemaking to determine what the salary level should be.” The DOL further telegraphed in its brief that it would soon “publish a request for information seeking public input on several questions that will aid in the development of a proposal.”

The request for information, which the DOL has now issued, sets out a list of questions for which it seeks information. The questions are grouped in 11 numbered paragraphs, though there are nearly three times that many questions. The following is a sample of some of the questions posed by the DOL:

  • Would updating the 2004 salary level for inflation be an appropriate basis for setting the salary level?
  • Should the regulations contain multiple salary levels?
  • Should there be different salary levels depending on the exemption?
  • Does the salary level in the 2016 Final Rule eclipse the duties test?
  • To what extent did employers, in anticipation of the 2016 Final Rule’s intended effective date, decrease newly non-exempt employees’ hours or change their implicit hourly rates so that the total amount paid would remain the same?
  • Would a test for exemption that relies solely on the duties performed by the employee without regard to the amount of salary paid by the employer be preferable to the current test that includes consideration of salary?
  • Does the salary level set in the 2016 Final Rule exclude from exemption particular occupations that have traditionally been covered by the exemption and, if so, what are those occupations?

The request for information asks that written comments be submitted electronically by September 25, 2017. It is unclear at this point, however, how the future decision from the Court of Appeals may affect the DOL’s present strategy. What is certain is that this area will continue to be fluid for the near future.

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