The Latest Plan from the U.S. Department of Labor: A Request for Information
On June 7, 2016, Alexander Acosta, the recently confirmed Unites States Secretary of Labor, announced that in the coming weeks the Department of Labor (DOL) plans to submit a request for information (RFI) on the overtime rule with regard to whether the salary threshold for overtime exemption should be raised under the Fair Labor Standards Act (FLSA). An RFI is an optional tool that agencies can use to help develop a proposed rule by requesting input from the public to provide opinions on whether a rule, such as the overtime rule, should be revised. The RFI also provides an agency with comments on what course the public believes the agency should take on a particular rule.
An RFI for the overtime rule would likely ask questions regarding the economic impact on increasing the salary threshold under the FLSA, which is currently set at $23,660. At Acosta’s confirmation hearing, he stated that the salary threshold regulation crafted by the Obama Administration which increased the threshold to $47,476 was excessive. Acosta said that he believed the salary threshold limit should be increased to about $33,000, which he feels is a reasonable salary threshold for FLSA purposes.
The changes to the overtime threshold under the FLSA has been in a state of limbo since November 22, 2016, when a federal district court judge halted the implementation of increasing the salary threshold limit to $47,476. Since then, twenty-one states filed an emergency motion for a preliminary injunction to halt the new rule from going into effect. As of right now, the DOL is subject to a June 30, 2017 deadline to file a brief on the pending litigation. The filing deadline was moved on April 14, 2017, before Acosta had been confirmed as labor secretary and before his announcement was made that the DOL was submitting an RFI on the overtime rule. With the RFI being mere weeks away from being submitted, the DOL could seek to further delay the filing of a brief in the litigation, in part to review the RFI data and decide whether DOL should withdraw their appeal.
The request for information will look for comments from employers and employees, especially the impact an increase in the salary threshold would have on non-profits organizations, local governments, and small businesses. If the DOL decides to withdraw their appeal of the litigation, then the threshold would remain at $23,660. Given the prior comments from Secretary Acosta it would appear that the DOL more likely will seek to increase the salary threshold to account for inflation to the cost of living since 2004, which was the last time the salary threshold amount under the FLSA was adjusted. Of course the entire rule is now open to potential restructuring and as a result employers will need to wait and see what the new final rule ultimately requires going forward.
By: Louis R. Lessig, Esquire
Partner at Brown & Connery, LLP
(With special recognition to Sean O’Brien)