New Overtime Rule Expected VERY Soon

In a recent podcast and blog post Littler attorney and former Department of Labor attorney, Tammy McCutchen, discusses the possibility (likelihood) that the highly anticipated Overtime rule will drop by Monday 5/16. In the podcast Ms. McCutchen gives some very good reasons why it will be then.  For example the Department of Labor sent the rule to the Office of Management and Budget (OMB) in mid March and the typical turn around time is under 60 days.

The other reason is that the Regulatory Review Act allows Congress to take action to block a federal rule from taking effect. The current President is not likely to sign such a resolution blocking rules he wants. Any delay past May 16 and it would give a new administration the ability to sign the resolution and block the rule. So as far as timing, Anytime between now and Monday is a pretty good possibility.

As far as what is contained in the rule, Ms. McCutchen outlines several possibilities, none of which are very appealing. She discusses some of the arguments their firm has made in comments public and private with DoL including the minimum pay level which has most of our members concerned. The minimum pay that has been discussed for an employee to be exempt from overtime has been somewhere in the 45-50 thousand dollars per year equivalent weekly salary. This is higher than both New York and California have for their state minimum for similar rules. These are the two highest cost of living states in the US. Having a federal statute that much higher than these states doesn’t make sense.

Even if the employee qualifies with a minimum weekly salary, there is a possibility that the rules on how duties are calculated that may disqualify some administrative personnel. This is all speculation but not out of the realm of possibility.

Of course, we will let you know when the new rule is published and we know what we have to expect. In any case, it would be a good idea to be prepared for the possibility of those employees you currently have classified as exempt to be reclassified as non-exempt and have to be ready to pay overtime. Watch the Gin Press for updates.