Wage and Labor Policy

Overview of the Department of Labor's Overtime Rule

In May 2016, the U.S. Department of Labor’s (DOL) Wage and Hour Division released its highly anticipated final rule to revise the overtime pay provisions under the Fair Labor Standards Act (FLSA). The rule updates the regulations governing which executive, administrative, and professional employees (commonly referred to as the “white collar” exemption) are entitled to overtime pay under the FLSA.

Ahead of the release of the final rule, FMI met with the Office of Management and Budget and DOL officials to voice our concerns with potential changes to the regulations. While FMI believes that doubling the salary threshold is too high, on issues of key importance, DOL adopted positions for which FMI advocated.

  • The final rule does not include any proposed revisions to the duties test, a significant win and an issue that we highlighted with the agency in our written comments submitted last September.
  • DOL also listened to industry concerns and provided additional time for businesses to comply with the new requirements, setting an effective date of December 1, 2016.
  • Business groups filed legal challenges to the rule ahead of the December 1, 2016 effective date and were successful in temporarily blocking the rule. The U.S. District Court for the Eastern District of Texas entered a temporary nationwide injunction. The Department of Labor has since appealed the injunction, and the rule now awaits further legal action to determine its fate, as written.

Upon release of the rule, FMI provided member companies with:

  • regulatory alert overview of the regulation’s key provisions, and
  • Hosted a webinar with insights from a former administrator of the wage and hour division at the Department of Labor.
  • DOL provided a chart comparing the current law to the 2015 proposed rule with the final rule.
  • DOL hosted a webinar with the Small Business Office of Advocacy to help companies comply with the overtime rule: “Preparing for the Overtime Final Rule”