On March 14th, the Department of Labor sent its final draft of the new regulations governing the white collar exemptions to overtime pay to the Office of Management and Budget. The OMB’s review is the final step required for a regulation to be published and implemented. Consequently, though the details are still “top secret,” the regulations’ release is more imminent. The OMB’s review may take as long as 90 days, but the review period typically lasts between 30 to 60 days, and sometimes even less.
Once released, the regulations will likely go into effect 60 days thereafter. Some pundits believe that the DOL is targeting Labor Day for an effective date, in which case, they will be published in final form before July 4th. In order for the Administration to foreclose a rare but possible congressional override vis-à-vis the Congressional Review Act, they must be published by early July. Though no one can accurately predict when they will actually be rolled out, based on this latest development it appears that they could be rolled-out as early as late April through early July.
The anticipated impact these regulations will have on employers will be widespread. The DOL appears primed to double the salary threshold for being exempt from overtime, and it may also redefine the types of duties employees may perform to qualify for the exemption. For details, click here. Employers may have to redesign their pay structures and reclassify employees from being exempt, to non-exempt.
Bottom line, employers should plan now to avoid being caught “flat-footed” by waiting and then only having 60 days to react. Experienced counsel should be consulted to weigh options and to make sure all bases are covered.