This morning, the Department of Labor’s (DOL’s) Wage and Hour Division (WHD) released a Notice of Proposed Rulemaking that would amend the Fair Labor Standard Act by extending overtime protections to salaried workers earning less than $1,059 per week, about $55,000 per year. The current income threshold is $35,568, which was raised in 2019 under the Trump administration. The proposed amendments would effectively reverse an exemption for so-called “white-collar” workers employed in an administrative, executive or professional capacity. Further, the proposed rule would automatically update the salary threshold every three years to better reflect current earnings data.
Notably, the DOL is not proposing any changes to how bonuses are counted toward the minimum salary level requirement. Current regulations stipulate that employers can satisfy up to 10% of the salary level through the payment of “nondiscretionary bonuses and incentive pay (including commissions).” NCA and others have encouraged the DOL to consider changes to reflect the importance of commissions in highly seasonal occupations such as golf and tennis instruction.
In 2015, the Obama administration failed to raise the overtime salary threshold to $47,000 following separate legal challenges from business groups and nearly two dozen state officials.
The highly anticipated rule is released despite the lack of a Senate-confirmed Labor Secretary—a position currently filled by Acting Secretary Julie Su. The Biden administration has continued to push forward its labor policy agenda through executive actions. The White House has yet to withdraw Su’s nomination though she lacked the necessary support from the Senate Democrat caucus for confirmation. However, the administration argues that because Su was previously confirmed as deputy secretary, the DOL’s succession policy allows her to continue her duties indefinitely.
Following an official inquiry from House Education and Workforce Committee Chair Virginia Foxx (R-Va.), the U.S. Government Accountability Office is reviewing the DOL’s succession policy. Ahead of Congress’ return to Capitol Hill following the August recess, some lawmakers have suggested examining the Federal Vacancies Reform Act, which establishes requirements for temporarily filling vacant positions in Executive agencies.
Contact NCA President & CEO Joe Trauger at [email protected] if you have any questions or comments.