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Proposed Overtime Rule Pushed to August 2023

The U.S. Department of Labor (DOL) has announced a delay in issuing a proposed overtime rule until August 2023, making it the third delay so far. The initial plan was to publish the proposed rule in April 2022, but it was pushed back to October 2022, and then again to May 2023.

However, the DOL may delay it again due to previous postponements, the current vacancy for the U.S. secretary of labor, or the possibility of more aggressive changes to the existing rule. It is crucial to note that employers must be patient and wait until August to understand how the proposed changes to the rule will affect them in 2023 and beyond.

Overtime Rule 2023 (1)

Any modification to minimum wage and overtime requirements under the Fair Labor Standards Act (FLSA) could have a severe impact on operational and compliance costs and increase litigation risks for employers. Furthermore, the DOL has delayed publishing a final independent contractor rule until October 2023, as per court documents. The rule was initially intended for release in May 2023.

What is the DOL’s Proposed Overtime Rule?

The DOL has yet to disclose the modifications it plans to implement on the overtime rule. Nonetheless, the regulation is expected to clarify the exemption of executive, administrative, and professional workers from the FLSA’s minimum wage and overtime requirements. The proposed overtime rule is anticipated to provide guidance on how to classify exempt employees and raise their salary levels under the FLSA. According to some experts, the DOL may create a system of automatic salary increases for exempt employees linked to the consumer price index, enabling the salary thresholds to adjust without formal rulemaking.

What Do Employers Need to Know?

Here’s what you need to know about the DOL’s proposed overtime rule: Once published in the Federal Register, there will be a designated period for public comment. After reviewing the comments, the DOL will determine whether to move forward with a final rule. Although some experts anticipate a swift decision, legal challenges are expected after the rule is finalized.

For now, employers are not required to alter how they classify or compensate their employees. However, those who could potentially be affected should monitor the DOL’s rule-making process closely. Until further updates are available, employers should operate as they normally would.

Tom Cockle, CLCS

Commercial Risk Advisor

The content of this article is of general interest and is not intended to apply to specific circumstances. It should not be regarded as legal advice and not be relied upon as such. In relation to any particular problem which they may have, readers are advised to seek specific advice. © 2023 Zywave, Inc. All rights reserved.