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July 2022: Proposed Overtime Rule Expected in October 2022

21 Jul

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Update Applicable to:
All employers.

What happened?
In its recent spring regulatory agenda, the U.S. Department of Labor (DOL) announced its plan to issue a proposed overtime rule in October 2022. According to the agency’s regulatory agenda, this proposed rule is expected to address how to implement the exemption of executive, administrative, and professional employees from the Fair Labor Standards Act’s (FLSA) minimum wage and overtime requirements.

What are the details?

What Will the Proposed Overtime Rule Address?
This proposed overtime rule could provide clarity for classifying exempt employees and increasing their salary levels under the FLSA. Some experts believe the DOL could even create automatic annual or periodic increases to exempt employees’ salary levels by linking them to the consumer price index, allowing exempt employees’ salary thresholds to adjust without formal rulemaking. The current annual salary threshold for exempt employees is $35,568.

The DOL has held several calls with industry stakeholders and recently conducted multiple regional listening sessions to gather information. Still, there’s no firm date when the agency will release the proposed overtime rule. Changes to minimum wage and overtime requirements under the FLSA could impact compliance costs and litigation risks for employers.

What’s Next?
Regulatory agendas outline a federal agency’s goals for the upcoming months. Although these agendas aren’t set in stone, they give insight into the current administration’s priorities and activities.

Once the DOL publishes a proposed rule in the Federal Register, there will be time designated for public comment. Subsequently, the agency will review comments and determine whether to move forward with a final rule.

Even after the DOL publishes the proposed overtime rule, it will likely be some time before this rule becomes final, if ever. Employers are not obligated to change how they classify or pay employees until the DOL’s proposed rule becomes final. However, potentially impacted employers will want to follow the DOL’s rulemaking process closely.

For more information, please see the links below:

DOL Announcement

Article

What do employers need to do?
Employers should review the links provided above and keep in mind that they are not obligated to change how they classify or pay employees until the DOL’s proposed rule becomes final. However, potentially impacted employers will want to follow the DOL’s rulemaking process closely.

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This communication is intended solely for the purpose of conveying information. The present post might incorporate hyperlinks directing readers to websites managed by third-party entities. The inclusion of any links within this communication is meant to serve as points of reference and could encompass opinion articles from various law firms, articles from HR associations, official websites, news releases, and documents of government agencies, and other relevant third-party sources. Vensure has no authority over these external websites and bears no responsibility for their content. Furthermore, Vensure does not endorse the materials present on these websites. The contents of this communication should not be interpreted as legal advice or as a legal standpoint concerning specific facts or scenarios. Nor should it be deemed an exhaustive compilation of facts potentially pertinent to federal, state, or local laws. It is strongly advised that employers solicit legal guidance from an employment attorney when undertaking actions in response to any legal updates provided. This is due to the possibility of future alterations occurring in federal, state, and local laws, regulations, as well as the directives and guidelines issued by governing agencies. These changes may transpire at any given time, potentially rendering certain portions of the content within this update void or inaccurate.

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