DOL’s Final Overtime Rule Expected in Latter Half of 2016

Conflicting estimates on when to expect the final rule

By Stephen Miller, CEBS Nov 25, 2015
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The Obama administration has indicated the U.S. Department of Labor’s (DOL’s) highly controversial rule that will expand the number of workers who are eligible for overtime pay—by changing many currently exempt workers’ status to nonexempt—will not be issued before July 2016.

According to the Fall 2015 Unified Agenda and Regulatory Plan, published on Nov. 20 by the Office of Management and Budget, the earliest the final rule could be released would be in July, but DOL officials have indicated that the rule is likely to be issued sometime closer to the end of the year while still leaving time for the rule to take effect before the president leaves office.

The proposed rule was released on June 30 of this year and received more than 250,000 comments during the comment period this summer.

Dates Are Aspirational

The Unified Agenda, published twice yearly in spring and fall, identifies regulatory priorities and contains additional details about the most significant regulatory actions that federal agencies expect to take in the coming year. However, the information it provides is collected well in advance of its publication, and the dates it gives for upcoming rules and regulations is best viewed as the earliest possible time frame, rather than as the likely issuance date, explained Nancy Hammer, senior government affairs policy counsel at the Society for Human Resource Management.

“The important thing to know about these dates is that they are estimates and rarely accurate,” Hammer said. “The agency has no legal obligation to meet that published deadline. Some rules have been on the regulatory agenda for years and they just change the date with the new agenda comes out.”

While SHRM anticipates that the rule will, in fact, become final in 2016, “I would not put too much emphasis on the July date” in the Unified Agenda, Hammer added. “DOL officials have said ‘late 2016.’ The bottom line is that HR needs to be ready to comply in 2016—that means looking now at how the rule could impact their organization,” she advised.

As SHRM Online recently reported, and Hammer noted, Solicitor of Labor Patricia Smith told attendees at an American Bar Association conference Nov. 5 that the DOL will not release its final rule on overtime until late 2016. That suggests that the time between publication of the final rule and its effective date will be short, and that the effective date of the new regulations likely will not exceed 30 to 60 days after the final regulations are published.

“The later the final rule is published, the smaller the window of time the department can allow before the new regulations become effective,” said Paul DeCamp, an attorney with Jackson Lewis in the firm’s Washington, D.C., office and a former administrator of the Wage and Hour Division.

Stephen Miller, CEBS, is an online editor/manager for SHRM. Allen Smith, J.D., manager of workplace law content for SHRM, contributed to this article.

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