Final Overtime Rule Clears Regulatory Review, Teeing Up Release

The White House budget office has cleared a US Labor Department rule expected to expand overtime pay protections to millions more workers, signaling it will soon be released to the public.

The Office of Management and Budget completed its review of the overtime rule (RIN: 1235-AA39) on April 10, according to its website.

The rule, proposed by the Wage and Hour Division last August, would update exemption thresholds for overtime eligibility under the Fair Labor Standards Act so that salaried workers making roughly $55,000 annually would be automatically owed overtime pay, an increase from the current level of $35,568.

But, that proposed salary threshold may change in the final version of the rule. The proposed rule noted that the threshold could be as high as $60,209, because it will be based on the most recent Bureau of Labor Statistics salary data, which has been updated since the proposal was released last year.

Workers who are salaried, make more than a certain amount of money per year, and work in a “bona fide executive, administrative, or professional capacity” are exempt from the FLSA’s requirements that employers must pay a time-and-a-half rate for any work logged beyond 40 hours in a week. Employees must meet all three of these factors for the exemption to apply.

Business groups concerned about the potential increased payroll costs from the rule change have warned they plan to challenge the regulation in court once it’s finalized.

Now that the rule has been approved by OMB, it could be officially published by the DOL any day.