DOL proposes huge increase on overtime threshold

The Department of Labor (DOL) has proposed an increase to the Fair Labor Standards Act's (FLSA) annual salary-level threshold for white-collar exemptions to overtime requirements—raising it to $55,068 ($1059/week) from $35,568. The department is also proposing automatic increases to the overtime threshold every three years. The new rule would restore the practice of applying the FLSA rule to U.S. territories, which was suspended in the 2019 amendments to FLSA. The nearly 60% increase is estimated to affect the compensation of as many as 3.6 million people. There is a 60-day period for public comment, which means a final rule isn’t likely until early 2024.

Obama redux plus

This action mirrors the failed efforts of the Obama administration to create a similarly large increase in the overtime threshold. That earlier effort was blocked in the courts for being beyond the DOL’s authority, especially with respect to the automatic indexing of the pay threshold. It’s certain that this proposal will face similar challenges.

In an attempt to avoid outright rejection by the courts, the proposed regulation has included a severability clause that permits a court to sever an offending provision while keeping the remainder of the regulation intact. This is a standard element of statutes, but it remains to be seen if a skeptical court would accede to this “end-run” around the “major question” or “non-delegation” theories in a non-Congressional action, such as a regulation.