MSCI, Stakeholders Urge DOL To Engage Business Community On Overtime Regulations

Last month, the U.S. Department of Labor (DOL) announced in its biannual regulatory agenda that it plans to issue a Notice of Proposed Rulemaking (NPRM) in April 2022 to update the salary levels that qualify for the executive, administrative, and professional employee exemptions (collectively known as “white collar” or “EAP” exemptions) and outside sales employee exemptions to federal overtime pay requirements.

As a reminder, in 2015, the Obama administration’s DOL proposed to increase the threshold by more than 100 percent, from $23,660 to $50,440 per year. After a public comment period, DOL issued a final rule in 2016 that would have raised the level to $47,476. That rule was stayed and then overturned by a federal court in 2017, however.

The Trump administration’s DOL then reevaluated the Obama administration rule in light of the litigation and issued a new rule in 2019 that increased the salary threshold to $35,568 per year starting January 1, 2020.

While Biden administration DOL leadership has not publicly released the salary threshold increase it is considering for the April 2022 NPRM, members of Congress and advocates have recommended it raise the threshold by more than 100 percent to at least to $82,732 by 2026.

The National Association of Wholesaler-Distributors and other business trade associations, including MSCI, recently wrote to Labor Secretary Marty Walsh requesting that the department hold stakeholder meetings prior to the development and issuance of its anticipated NPRM.

The letter said the rulemaking will be significant with respect to cost, difficulty of implementation, and impact on the workforce, particularly given current acute labor shortages. The signatories urged DOL to follow past precedent and hold meetings with the regulated community to obtain input on the potential impact of any changes to the overtime exemption requirements.

Read the letter here.