Republicans Propose Bill Invalidating DOL’s Proposed Final Rule Regarding Overtime Exemptions

Senate and House Republicans pushed back on the DOL’s proposed final rule on the “white-collar” overtime exemptions by proposing a new bill, the Protecting Workplace Advancement and Opportunity Act, seeking to invalidate the DOL rule.

Under current regulations, employees must satisfy certain tests regarding the job duties they perform and be paid at least $23,660 per year, on a salary basis to be considered exempt under the FLSA’s “white-collar exemptions.” The DOL’s proposed final rule, however, seeks to more than double the minimum salary level from $23,660 to $50,440 per year and provides for automatic annual increases to the minimum salary threshold. Although the proposed final DOL rule does not include any specific changes to the “job duties” component of the exemptions, such changes may be included in the final rule.

The new bill sets forth several criticisms of the DOL’s proposed rule including, among others, that the Secretary of Labor substantially underestimated financial and non-financial compliance costs for employers, failed to consider the impact on workplace flexibility for employees reclassified as non-exempt, did not account for the impact on multi-state employers whose employees have “different costs of livings and different salary scales” and who would face “unique” challenges in reclassifying their employees, and lacks the authority to implement automatic increases to the salary thresholds without notice and comment.

The bill would require the Secretary of Labor to nullify the DOL’s proposed final rule on the “white-collar” exemptions, conduct “a full and complete economic analysis” concerning the impact on small businesses, non-profits, and others before implementing any “substantially similar” rule, and provide for a notice and comment period on all changes, including any revisions to the job duties test.

President Obama, however, is expected to veto the bill, even if passed.

For answers to any questions regarding this blog, or with regard to FLSA issues generally, please feel free to contact an attorney in the Gibbons Employment & Labor Law Department.

Elizabeth Cowit is Counsel in the Gibbons Employment & Labor Law Department.