Department of Labor Delays Overtime Rule Decision

by Ed/Glen Chamber on November 25th, 2015

‚ÄčThe U.S. Department of Labor (DOL) announced last week that it will not release its final rule revising which workers are and are not eligible for overtime until late 2016. The time between publication of the final rule and its effective date may be short, maybe as little as 30 days. There is also a possibility of a phased-in effective date.

The rule calls for workers earning less than $970 per week, or $50,440 annually, to be eligible for overtime, which is more than double the current salary threshold. There is support in both the Democratic and Republican parties for raising the salary threshold some, but not as high as doubling the amount. The rule could also be impacted by the results of the Presidential election.

In the meantime, employers should give thought to how this will affect their current employees. Employers might prepare to reclassify workers by getting ready now for different possible scenarios under the final rule; do their best to reclassify after the final rule; or - on the riskier side - wait until after the presidential election in hopes that, should a Republican prevail, the rule might be revoked.

The proposed rule was released on June 30 of this year and received more than 250,000 comments during the comment period this summer. Details of the proposed rule can be found on DOL's website. The Ed/Glen Chamber will continue monitoring this issue.

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