The U.S. Department of Labor appears to be moving forward on an overtime rule that caught up millions of employees and their employers in some serious workplace drama last year.
To recap: Last year, under the Obama Administration, a new rule was expected to take effect that would have required an additional 4 million American workers to be paid overtime if they worked more than 40 hours in a week.
[See: 25 Best Jobs That Pay More Than $100K.]
To understand the change, you need to know that the federal government divides all workers into two categories: exempt workers, who are not required to receive overtime pay, and nonexempt workers, who must receive overtime pay. The exempt category covers employees who perform relatively high-level executive or professional work, outside sales employees and a few other narrowly defined categories. Currently, you need to earn at least $23,660 a year to be considered exempt. The new rule would have raised that to $47,476 — making millions of workers non-exempt and thus eligible for overtime pay.
The current salary threshold was last set in 2004, and it hasn’t increased with inflation. That’s led to an increasing number of workers with relatively low salaries who are working long hours for no extra pay. And although the overtime exemption was intended for relatively highly paid, skilled professionals, in practice, employers have really stretched that definition — and so you see things like, say, a retail manager working 60 hours a week while earning $30,000 because she’s considered “exempt.”
[See: 12 Steps to Asking for a Raise and Getting It.]
The new rule raising the salary level was scheduled to go into effect on Dec.1, 2016, but just one day before that, a Texas judge issued a temporary injunction that halted it nationwide. By that time, many employers had already reclassified workers as non-exempt, or even raised some people’s salaries to bring them up to the expected new threshold. Other employers had changes scheduled to go into effect, but halted them at the last minute when the injunction was issued. That’s left a lot of people in limbo, unsure of how this would ultimately play out.
Since then, the new presidential administration has said that it won’t defend the new overtime rule in court.
Additionally, the Department of Labor has announced that it’s working on a new overtime rule — not the current one, and not the one that was set to take effect last year. It’s also waiting for the Fifth Circuit Court of Appeals to confirm that it has the right to set that threshold at all.
[See: Be Thankful for These 6 Workplace Rights.]
On July 26, the Department of Labor published a Request for Information, seeking input from the public on these questions related to the overtime rule:
— “Should the 2004 salary test be updated based on inflation? If so, which measure of inflation?
— Would duties test changes be necessary if the increase was based on inflation?
— Should there be multiple salary levels in the regulations? Would differences in salary level based on employer size or locality be useful and/or viable?
— Should the Department return to its pre-2004 standard of having different salary levels based on whether the exemption asserted was the executive/administrative vs. the professional?
— Is the appropriate salary level based on the pre-2004 short test, the pre-2004 long test, or something different? Regardless of answer, would changes to the duties test be necessary to properly ‘line up’ the exemption with the salary level?
— Was the salary level set in 2016 so high as to effectively supplant the duties test? At what level does that happen?
— What was the impact of the 2016 rule? Did employers make changes in anticipation of the rule? Were there salary increases, hourly rate changes, reductions in schedule, changes in policy? Did the injunction change that? Did employers revert back when the injunction was issued?
— Would a duties-only test be preferable to the current model?
— Were there specific industries/positions impacted? Which ones?
— What about the 2016 provision that would permit up to 10% of the salary level to be satisfied with bonuses? Should the Department keep that? Is 10% the right amount?
— Should the highly compensated employee exemption salary level be indexed/how? Should it differ based on locality/employer size?
— Should the salary levels be automatically updated? If so, how?”
If you want to submit comments on any of these questions, you’ll find instructions here. The deadline to submit input is Sept. 25.
More from U.S. News
25 Best Business Jobs for 2017
The 25 Best Social Services Jobs of 2017
The Federal Government is Taking Up Overtime Pay Again originally appeared on usnews.com
