This past September, the Wage and Hour Division of the Department of Labor (DOL) issued a notice of proposed rulemaking (NPRM) to revise the overtime regulations set forth in the Fair Labor Standards Act (FLSA). The current regulation sets forth eligibility exemptions for “executive, administrative, and professional” workers, as well as those engaged in outside sales, like many independent insurance agents, and computer employees. These “white-collar” exemptions are based on each worker’s annual salary and their specific duties.

The NPRM would change the exemption status of some employees based on the minimum salary and overtime pay requirements in the FLSA. Specifically, the NPRM would increase the minimum salary level required for workers to be exempt from overtime pay from $684 per week ($35,568 annually) to $1,059 per week ($55,068 annually) and create a mechanism by which this threshold would be updated automatically every three years.

PIA responded to the NPRM to alert the DOL to the risks posed by the proposal, which include but are not limited to:

• Increasing the cost to employers of hiring and retaining workers
• Incentivizing employers to cut labor costs by laying people off
• Worsening working conditions
• Reducing work hour flexibility for employers and workers
• Denying workers career advancement opportunities currently available to them
• Increasing employer confusion and misclassification of workers

PIA also joined in a coalition letter that provided similar warnings. We will continue to monitor the DOL’s activity around the overtime rule and urge it to proceed with caution as it considers changes to the rule.