Not so fast with updated OT regs, employer groups say

When the Dept. of Labor (DOL) announced plans to update the salary level requirements for who’s exempt from overtime, that caused concern for some businesses.

In fact, 110 associations and other groups representing employers sent the DOL a letter. They made a simple request: Hold stakeholder meetings before issuing a Notice of Proposed Rulemaking in April of 2022.

Under presidents Bush, Obama and Trump, the DOL released regs on the so-called white-collar exemptions. But that happened only after the agency gathered input from stakeholders, the letter pointed out.

A rule increasing the salary threshold would be significant in terms of cost and difficulty of implementation, the employer groups told the DOL.

$684 per week for overtime exemption

In 2020, the salary threshold jumped up to $684 per week. That comes out to $35,568 annually. So, to qualify as exempt from the Fair Labor Standards Act’s (FLSA’s) minimum wage and overtime requirements, employees’ paychecks must total at least that much. For now.

No word on how much of an increase businesses can expect. When the DOL indicated, in its latest Regulatory Agenda, that it planned to propose a rule on the FLSA exemptions early in 2022, it didn’t include a dollar amount.

But if you ask Secretary of Labor, Marty Walsh, the current salary threshold is “definitely” too low. That’s what he said in 2021, when fielding questions about the executive, administrative and professional exemptions.

Gauging dollar amounts for 2022

The lack of detail makes planning tough for CFOs. To gauge where we might be heading in 2022, consider some current state salary thresholds.

Three examples:

Executive/supervisor, administrative and professional employees in Colorado must earn at least $865.38 per week ($45,000 rounded annual equivalent).

In Maine, to qualify as exempt from overtime, an employee must earn a salary of at least $735.59 per week, or $38,251 per year. 

Washington state has set the salary threshold at $1,014.30 per week, which comes out to $52,743.60 annually.

As the DOL releases more details on the federal regulatory changes, we’ll get them to you.