The U.S. Department of Labor will likely propose changes to its overtime regulations this spring, Secretary of Labor Thomas E. Perez told lawmakers March 18.
President Obama last March instructed DOL to simplify its rules and raise its salary threshold defining which workers are exempt from overtime.
To be considered exempt from the minimum wage and overtime provisions of the Fair Labor Standards Act, most executive, administrative or professional employees must be paid at least $455 per week on a salary basis and meet the applicable “highly compensated employee” duties test for the exemption sought.
In a House Education and Workforce Committee hearing, Perez told members of Congress that DOL is working “overtime” on the rules and that he’s “hopeful that sometime this spring we will be in a position to put a proposal out.”
“The president directed us to figure out what is fair: How can we adjust this threshold to reflect the fact that it has not kept up with inflation? How can we adjust the threshold [so it] reflects the fact that if you work overtime you should be paid overtime? And how can we simplify the process which would be helpful for employers and workers alike?” he said.
Perez added that he has personally participated in meetings with various stakeholders, including employers across an array of sectors. And once the department issues a Notice of Proposed Rulemaking, there will be a comment period, providing another opportunity for feedback, “but our goal is to make a rule that’s fair and make a rule that facilitates compliance and is simpler.”
Rep. Mark Takano, D-Calif., asked Perez whether the department has considered tying the salary threshold to inflation. Perez said that the idea has been raised several times and that DOL would look to comments received in response to the NPRM for guidance.
DOL originally planned to release the NPRM in November 2014 but later changed that goal to February 2015.
Perez also took the opportunity to encourage lawmakers to raise the federal minimum wage. “Nobody who works a full-time job should have to live in poverty and we are continuing to work — through executive action and through work with our state and local partners — to raise the minimum wage. But still, there’s no substitute for federal legislation that would give low-wage workers in all 50 states a hard-earned, well-deserved raise.”
For more information on the salary basis test, see Thompson’s HR Compliance Expert.