The U.S. Department of Labor is considering a lower, $47,000 salary threshold for its upcoming overtime regulations, according to news reports. A former Wage and Hour Division administrator called the move an “empty gesture” and said that setting the threshold any higher than $35,000 is irresponsible.
The version of the rules that DOL proposed last June would more than double the threshold for its Fair Labor Standards Act white-collar exemptions. If the rules were implemented as proposed, employees only would be eligible for those overtime exemptions if they were paid $970 per week, or $50,440 annually.
DOL sent final rules to the White House’s Office of Management and Budget on March 14. A group of Democratic lawmakers urged OMB to approve the rules quickly while Republicans in Congress introduced legislation to block the rules.
OMB has been meeting with stakeholders every few days and, according to various news reports, DOL agreed to consider a $47,000 threshold. Final rules are expected any day.
Too Small a Reduction?
Tammy McCutchen, an attorney with Littler Mendelson, thinks such a reduction would be an “empty gesture” on DOL’s part. “It allows them to say, ‘We listened to comments from employers that our proposed salary level was too high.’ But, it is too small a reduction to actually address our concerns,” she told HR Compliance Expert.
McCutchen, a former administrator at DOL’s Wage and Hour Division, has been involved in discussions at OMB though not about the rumored $47,000 proposal in particular. She noted that such a threshold still would be well above the minimum salary level for exemption in New York and California. The thresholds in those states are $35,100 and $41,600, respectively.
“Any salary level that sets a federal standard that is higher than the two highest cost-of-living states in the country is still way too high,” and would inhibit economic and job growth in rural areas with lower costs of living and lower earning levels, McCutchen said. She recommends that DOL set its threshold no higher than $35,000, contending that anything higher would be irresponsible.