DOL’s #Overtime Rule: A Missed Opportunity


The first thought that went through my mind when the Department of Labor (DOL) issued its final rule on changes to the overtime exemptions under the Fair Labor Standards Act (FLSA) was this: DOL missed a real opportunity to create a rule that works for both employees and employers.

After receiving over 270,000 comments to their proposed overtime rule (many from SHRM members!)… and having  benefited from the testimony of employers like SHRM member Liz Hays whose nonprofit will struggle under the new salary threshold…and personal meetings with HR professionals like Tiffany Bloyer, who spoke frankly about the challenges faced by her employer, a small local government...after all this, the Administration unfortunately failed to make any substantive changes to the main elements in the final rule.

SHRM was a strong voice for the workplace supporting an update to the salary threshold using the same guidelines DOL has used in past threshold updates.  Instead, DOL set the salary threshold, under which employees are eligible for overtime, at the 40th percentile of the lowest wage census district—twice as high as they have measured in the past.  In addition, they left in an automatic increase to the threshold. The final rule will automatically increase the salary threshold every three years, starting in January 2020.  In that year, DOL estimates the new 40th percentile will be $51,168—a number that will grow with each automatic adjustment.

DOL didn’t need a new rule to do this—the Department has the authority and the ability at any time to increase the salary threshold through notice and comment rulemaking.  Why is notice and comment important? Because it allows the public and employers to let DOL know whether the new threshold makes sense for them and for their industry or geographic region. It also allows DOL to consider whether the current economic conditions can support the increase.

In its materials on the rule, DOL has also downplayed concerns expressed by HR professionals who have created the kind of workplace flexibility that keeps employees engaged. Despite assertions to the contrary, the reality is that flexibility for reclassified employees will suffer.  Non-exempt employees have to keep track of their time and exempt employees don’t—there is nothing complicated about that—except for the employee who loses the ability to control his or her own schedule! In glossing over the concerns of employers and making these changes, DOL missed a big opportunity to create a rule that works for everyone.

So What Happens Now?

In order to help you take practical steps to implement the rule, SHRM offers the following resources:

In addition, SHRM will continue to aggressively advocate for relief from the overtime rule – with the focus now squarely on Congress. If you haven’t already, NOW is the time to urge Congress to support the Protecting Workplace Advancement and Opportunity Act (S. 2707 and H.R. 4773), legislation that would stop the rule until DOL performs a better economic analysis of the rule’s impact on specific sectors.  This legislation is a top priority for SHRM and 80+ other members of the Partnership to Protect Workplace Opportunity.




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