Issuance of DOL’s Overtime Rule is Imminent
Last summer, we alerted you to the Department of Labor’s (“DOL”) anticipated rule (the “Overtime Rule”) that would significantly change the salary threshold for exemption from the overtime requirements of the Fair Labor Standards Act (“FLSA”). Because of the upcoming federal elections, we anticipate that the final rule will be published this month to avoid its review by the next congress.
The DOL published the proposed rule on July 6, 2015, permitting submission of comments through September 4, 2015. Due to the significant impact of the proposed rule and the breadth of employers and individuals affected, many requested an extension of the comment period. However, the DOL refused, stating in a letter by Wage and Hour Division Administrator David Weil, that the standard comment period provided “sufficient time” and that, “coupled with the feedback already received … will meet the goal … ensuring the Department has the level of insight from the public needed to produce a quality regulation.” Even without an extension, the proposed rule generated almost 300,000 comments.
The Overtime Rule is now in the hands of the White House’s Office of Management and Budget (OMB)—the final stage before a rule is published and sent to Congress for consideration. While the OMB review typically takes around four to six weeks, and theoretically could take months, the timeline for this rule in particular has been expedited in a speculative effort to avoid potential procedural delay under the Congressional Review Act (“CRA”). The CRA was passed in 1996 under Speaker Newt Gingrich, and functions as a procedure for Congress to overturn statutory regulations promulgated by executive branch agencies by way of passing a “resolution of disapproval.” However, a resolution of disapproval may be overturned by Presidential veto.
The President would inevitably reject any congressional resolution of disapproval that nixes the Overtime Rule, and so the potential CRA road block for the Obama administration and current DOL officials lies in a required 60-day period for congressional review. The CRA stipulates that if a major rule is submitted to Congress with fewer than 60 session days remaining on the legislative calendar, then the next Congress will have a similar 60-day period to consider the rule. In other words, if the overtime rule was not approved and released by the OMB by this week—per calculations by the Congressional Research Service—it will be subject to approval and implementation by the next Congress and President. Thus the Obama administration and current DOL officials are sufficiently motivated to continue on an expedited timetable, and many expect that a final rule will be published in the next few days.