Professional Service Agreement

DOL Soliciting Comments on Revision of Overtime Rule

July 31, 2017

The U.S. Department of Labor (DOL) has released its much anticipated Request for Information (RFI) on the controversial overtime rule which, had it been implemented, would have nearly doubled the salary threshold for the executive, administrative, and professional (EAP) exemption at which Fair Labor Standards Act (FLSA) overtime requirements would not apply.

In a press release, the DOL called the RFI "an opportunity for the public to provide information that will aid the department in formulating a proposal to revise these regulations." The RFI was published n in the Federal Register July 26, 2017.

The embattled final rule, which would have gone into effect December 1, 2016, set the EAP floor at $913 per week, or $47,476 annually, for full-time workers—the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the south.

Pending litigation. The RFI notes that litigation challenging the final rule is now pending in the Fifth Circuit and the Eastern District of Texas. The district court enjoined the DOL from implementing and enforcing the final rule. The appeal concerns the reasoning of the district court that called into question the DOL’s authority to utilize a salary level test at all in determining the exempt status of executive, administrative, and professional employees.

The Department of Justice, on behalf of the DOL, is arguing that the Secretary of Labor has authority to establish a salary level test. However, in a reply brief filed in the Fifth Circuit, the DOL stated that it has decided not to advocate for the specific salary level set in the final rule at this time and intended to undertake further rulemaking to determine what the salary level should be.

Rulemaking. In light of the pending litigation, the DOL is issuing the RFI rather than proceeding immediately to a notice of proposed rulemaking (NPRM) because it believes that gathering public input on the questions posed in the RFI will greatly aid in the development of an NPRM, and help the department move forward with rulemaking in a timely manner.

The DOL also said that consistent with President Trump’s Executive Order 13777, "Enforcing the Regulatory Reform Agenda," it is reviewing the impact of the final rule’s changes "with a focus on lowering regulatory burden."

In response to the RFI, the Economic Policy Institute pointed out that "The administration does not need more information. DOL spent two years studying the rule and received nearly 300,000 comments on it."

Comments. The DOL is soliciting comments on the 2016 revisions to the white collar exemption regulations, including whether the standard salary level set in that rule effectively identifies employees who may be exempt, whether a different salary level would more appropriately identify such employees, the basis for setting a different salary level, and why a different salary level would be more appropriate or effective. It also asks whether the regulation should contain multiple standard salary levels and, if so, how should these levels be set: by size of employer, census region, census division, state, metropolitan statistical area, or some other method.

Written comments must be submitted by the methods detailed in the RFI within 60 days after its publication in the Federal Register.