PPWO Calls on DOL to Abandon Overtime Rulemaking

On May 11, PPWO and 93 organizations sent a letter to Secretary of Labor Marty Walsh urging him to abandon or at least postpone issuance of the Department of Labor’s announced proposed rulemaking altering the overtime regulations under the Fair Labor Standards Act (FLSA).

Over the past two months, the employer community has warned DOL during its listening sessions that “the economy today cannot support changes to the white-collar exemptions under the FLSA.” “Due to significant concerns with supply chain disruptions, workforce shortages, inflationary pressures, and the shifting dynamics of the American workforce following the COVID-19 pandemic, any rule change now would be ill-advised. Importantly, DOL last updated the overtime regulations only three years ago, which strongly suggests there is no need for urgency in issuing more changes.”

PPWO called on DOL to abandon or at least postpone issuance of its announced NPRM “until the current economic situation stabilizes and improves to allow the American workforce, employer community, and DOL itself to more fully understand how the pandemic has shifted the paradigm of work in America.”

Employer Community Calls on DOL to Hold Stakeholder Meetings Before Developing, Issuing New Overtime Proposal

On January 25, 110 employer organizations sent a letter to Secretary of Labor Marty Walsh urging the Department of Labor (DOL) to hold stakeholder meetings prior to the development and issuance of its anticipated proposed rulemaking on the “white collar” exemptions to the overtime regulations under the Fair Labor Standards Act.

In the letter the organizations explain, “This will be a significant rulemaking with respect to cost, difficulty in implementation and impact on the workforce, particularly given the current acute labor shortages. Our organizations urge DOL to follow past precedents and hold meetings with the regulated community to obtain input on the potential impact of any changes to the overtime exemption requirements.”

DOL would benefit from stakeholder input on the current economic situation and the potential impact new overtime regulations could have on the workforce and economy. Past administrations have held such meetings, and the employer organizations strongly urge the Biden DOL to follow suit. Given the vast increases in remote work and concerns around historic increases in inflation, it is particularly important for DOL to gather input before issuing a proposed regulation.

Biden Administration Is Preparing New Overtime Proposal

On December 10, the Department of Labor announced it is planning to issue a new overtime regulation to raise the minimum salary threshold under which all employees must be paid overtime. DOL has not publicized a specific figure yet. We also believe the administration is considering altering the duties test, or the test used to determine if a worker’s specific job responsibilities make them ineligible for overtime pay.

The overtime regulations under the Fair Labor Standards Act have been updated several times over the last few years. The Obama administration wanted to raise the salary threshold to over $50,000 per year, an increase of over 100%. They were forced to lower the figure to $47,476 in their final rule, but this figure still put the economy and workers’ wellbeing in jeopardy. While the Trump administration was able to right the ship and bring the threshold down to a more reasonable $35,568 per year, we expect the Biden administration to “go big” in their proposal.

PPWO will file comments on the upcoming proposal to ensure reasonable, responsible regulations are put in place.

Small Group of Congressional Dems Call for Massive Increase in Overtime Salary Threshold

On March 25, 2021, a small group of Democrats in Congress called on the Biden administration to increase the minimum salary threshold, under which employees must be paid overtime, to at least $82,732 by 2026. This would be an increase of over 100% over the current level of just over $35,000. This increase would have devastating consequences for the economy, especially given the current economic environment caused by the COVID-19 pandemic.

PPWO strongly urges the Biden administration to reject this unreasonable and dangerous recommendation.

DOL’s New Lower Threshold Won’t Fix this Rule

This is still a 99% increase. A token reduction will not alleviate the harm this rule will do to nonprofits, colleges, and small businesses and their employees. Moreover, the salary threshold must take into account regional differences in cost of living, which the current Labor Department approach does not. We’re encouraged by reports that the Labor Department is beginning to listen to the outcry from the nonprofit, higher education, and small business communities, but this rule needs a comprehensive reevaluation before it is released, else we risk doing serious damage to precisely the organizations and workers we all want to thrive,” said Lisa Horn, spokeswoman for the Partnership to Protect Workplace Opportunity (PPWO), a coalition of more than 70 organizations representing the broad employer community. 

NPR Highlights Negative Consequences of Overtime Rule

On September 15, NPR published an article discussing the consequences of the Department of Labor’s overtime proposal. The article explores how businesses across the country see this proposal as more harmful to their employees than helpful. Workers will lose income, flexibility, status in the workplace, and potentially even their job. You can read the article here.

Grassroots Comments Delivered to DOL

Over the past two weeks, the Partnership to Protect Workplace Opportunity delivered to the Wage and Hour Division of the U.S. Department of Labor 534 comments requesting a 60-day extension to the comment period on the Department’s proposed rulemaking altering the overtime requirements under the Fair Labor Standards Act. Employers from a variety of different companies, organizations, and higher education institutions submitted the comments, demonstrating that businesses and nonprofits across the country understand the serious consequences this proposal will have and that the current time period does not provide adequate time to analyze the rulemaking.

Only extensive outreach will get the Department to extend the comment period. Please continue to reach out to your members of Congress and the Department through our grassroots portal.