Overtime Rule Sent to Office of Management and Budget

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The Department of Labor (DOL) sent a new proposed rule to address overtime pay to the Office of Management and Budget (OMB) for review.  This review is a required step in the rulemaking process before the proposed rule can be formally released for public comment.  While we are not sure how long the rule will be under review at the OMB Office of Information and Regulatory Affairs, DOL’s regulatory agenda suggests the proposed overtime rule could be published in March 2019.

A 2016 overtime rule promulgated by the Department during President Obama’s Administration would have doubled the minimum salary level for overtime exemptions from $23,660 to nearly $48,000.  A Texas federal court struck down the rule in November 2016.  When President Trump took office in 2017, the DOL solicited additional public comments on whether the current threshold of $23,660 set in 2004 should be updated for inflation, and whether there should be multiple levels based on region, employer size, industry or other factors.

Labor Secretary Alexander Acosta has expressed support on multiple occasions for some increase in the minimum salary threshold for the exemption. It was last raised in 2004. We expect any increase in the new proposed rule to be significantly lower than the nearly $48,000 proposed by the Obama Administration.

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