Last Updated December 1, 2016
The US Department of Labor (DOL) on May 18 issued a much-anticipated final rule that would nearly double (to $47,476) the salary threshold under which virtually all workers must receive time-and-a-half pay whenever they work more than 40 hours in a given week. Seeking to block or delay the rule, its opponents promptly filed numerous lawsuits disputing its validity. On November 22, the plaintiffs in one such case found success when a federal court in Texas granted their request for a nationwide preliminary injunction. This decision essentially prevents the rule from taking effect while the court considers the merits of the plaintiff’s legal challenge. DOL announced its intent to appeal on December 1 – the day the new salary level was supposed to become effective. With the case pending, next steps for LSA members should include consultation with legal counsel to prepare for a variety of compliance scenarios and timelines.
On July 6, 2015, the Department of Labor (DOL) released a proposed rule intended to increase the number of workers who are eligible to receive overtime pay by raising the annual white collar exemption threshold from $23,660 to $50,440. These proposed changes were subject to the federal rulemaking process, including a 60-day public noitce and comment period during which over 270,000 comments were submitted, including LSA's.
After taking these comments into consideration, DOL sent its revised rule to the Office of Management and Budget (OMB) for review in mid-March, sooner than expected. As OMB approval is a final step before a regulation can be published, this accelerated timeline put DOL on track for a Spring 2016 release date. Previously, the final rule wasn’t expected until July.
On May 18, DOL published its final overtime pay rule, which sought to raise the white collar exemption threshold to $47,476, to be automatically updated every three years. The rule was finalized with an effective date of December 1, 2016. With the rule, DOL issued a time-limited non-enforcement policy for certain providers of Medicaid-funded services for individuals with intellectual or developmental disabilities. Learn more about this exception and the final rule from DOL.
In response to the final rule, its opponents pursued numerous judicial and legislative strategies to block or delay its implementation. On November 22, one such legal claim was met with success, when a federal district court in Texas sided with those challenging the rule's legitimacy, granting their request for a nationwide preliminary injunction. The court's decision essentially prevents the rule from taking effect while the court considers the merits of the case before it. On December 1, the day the new salary threshold was supposed to kick in, DOL announced its intent to appeal the injunction. As this process unfolds, LSA will continue to update members via this resource page, our newsletters, and social media accounts.
When DOL released its proposed rule, it gave the public only 60 days to submit comments. Believing this window to be insufficient, LSA joined Independent Sector and over 145 organizations in a letter to DOL shortly after the proposed rule's publication, requesting an extension of this timeline. LSA and LSA-DN also sent a joint letter echoing this request. On September 1, DOL formally rejected calls for an extension, and LSA submitted comments in accordance with DOL's September 4 deadline. Since then, we have had several meetings with officials from DOL, the White House, and OMB to express LSA member concerns and advocate for constructive solutions. We continue to update members on the status of the rule's implementation and enforcement.
Outreach and Education
To help members better understand and prepare for these proposed, sweeping changes, LSA created a set of FAQs analyzing DOL's draft changes. We also encouraged members to conduct a mission-based and general impact analysis of the proposed regulation, in order to more fully understand the potential effects on member organizations and those they serve and employ.
LSA also hosted a webinar on September 18 to explore next steps for LSA members, featuring issue experts from Independent Sector and ANCOR; the archived webinar is available here.
As the need for policymaker education continues, LSA created a DOL Overtime Pay Rule Toolkit to help our members communicate the potential impacts of the proposal to their lawmakers and other stakeholders. In addition, the rule was the focus of a session at the LSA 2016 Annual Conference. We invite you to access the session presentation and materials, including a Power Point and Compliance Planning Checklist. Most recently, LSA created an FAQ document about the anticipated contents and timeline of the final rule, which is available here. Shortly after the rule's publication on May 18, LSA distributed an Advocacy Alert, followed by a Preliminary Analysis of the final rule later that afternoon. On November 23, LSA alerted members to the Texas court's preliminary injunction.
DOL to Appeal Preliminary Injunction
December 1, 2016 – Following a Texas court’s November 22 issuance of a nationwide preliminary injunction enjoining the new overtime rule, DOL announced its intent to appeal the decision earlier today, filing the required paperwork with the Fifth Circuit Court of Appeals. Notably, it could be a while before the appeal is adjudicated, as the appellate process can take several months or more. To speed things up, DOL may ask the Fifth Circuit to expedite the appeal, but there’s no guarantee the court would agree to do so. Absent an expedited hearing, a final court decision is unlikely to come while President Obama is still in office, leaving the rule’s fate to President-elect Trump’s incoming administration.
Federal Judge Temporarily Blocks DOL Rule
November 22, 2016 - Today, a federal court ruled in favor of plaintiffs challenging the overtime rule's validity, halting its implementation nationwide. The claim at issue was brought by nearly two dozen states and a coalition of business groups, who filed two separate lawsuits in a Texas federal court to overturn the Department of Labor’s overtime regulation; the complaints were then consolidated into a single case. With just over one week before the rule was scheduled to take effect, Judge Amos Mazzant, an Obama appointee, granted the plaintiffs’ request for a preliminary injunction, effectively delaying the rule pending the court’s resolution of the underlying legal challenge.
Although the injunction is temporary, Judge Mazzant's decision signals a strong likelihood that he will eventually side with the plaintiffs on the merits of the case, adding uncertainty to the rule’s future; with Republicans controlling both chambers of Congress and the Trump Administration set to take office in January, the regulation’s longevity was already in jeopardy.
DOL said Tuesday that it is considering “all of our legal options”, but the agency’s path forward is unclear. While the department could challenge today’s ruling, the incoming administration will have the authority to drop such an appeal. "We strongly disagree with the decision by the court, which has the effect of delaying a fair day's pay for a long day's work for millions of hardworking Americans. The department's overtime rule is the result of a comprehensive, inclusive rulemaking process, and we remain confident in the legality of all aspects of the rule,” the agency said in a statement.
LSA will keep members updated as the rule makes its way through the federal court system. Given the uncertainty surrounding today’s ruling, we recommend consulting with an employment attorney to ensure your organization is adequately prepared for a variety of legal outcomes. Read the court's order here, and more from LSA here.
Flurry of Pre-Recess Legislation Seeks to Block DOL Overtime Rule
October 3, 2016 - Efforts are underway to prevent the Labor Department’s Overtime Final Rule from becoming effective as scheduled on December 1. Before recessing for the November elections, the House passed a bill (HR 6094) to delay implementation of the overtime rule by six months, until June 1, 2017. On September 29, Senator Lankford (R-OK) introduced a companion bill (S 3462), but the White House made clear that President Obama would veto the measure if it reached his desk.
Also introduced on September 29, the Overtime Reform and Review Act (S 3464) is a modified version of the Overtime Reform and Enhancement Act (HR 5813), introduced in the House on July 14. Both bills would create a phase-in for the rule and block automatic increases. With the new Senate bill, there would also be a "pause year" after the first, substantial increase to allow for the impact to be absorbed, reviewed, and measured. Additionally, it would require the Government Accountability Office to conduct a comprehensive study after the initial increase. Finally, it would exempt non-profit, Medicaid and Medicare dependent providers as well as state and local governments after the first increase, unless the Administration certifies that the increase did not increase part-time work, or negatively impact workplace flexibility, benefit structures, career advancement opportunity, or job growth.
With Congress in recess until after the elections, LSA does not believe there is a realistic path forward for legislation that seeks to block or delay the rule before it takes effect on December 1, and we continue to encourage all members to plan for full implementation by this date. Read more from ANCOR.
Lawsuits Filed to Block Overtime Regulations
September 21, 2016 – Yesterday, officials from 21 states filed suit in federal court in Texas challenging the new regulations. Shortly thereafter, the U.S. Chamber of Commerce and a collection of other business groups filed their own suit, in the same court. The complaint of the states challenges the power of Congress and the Labor Department to set wage standards for non-federal public employees. The states assert that “Congress does not have the authority to dictate to states how, or how much, they must pay their state employees.” To prevail, the states must get the U.S. Supreme Court to overturn its own precedent from the 1980s. The business groups’ suit claims that the DOL regulations are “arbitrary and capricious,” an allegation that carries a heavy burden of proof. Both lawsuits say the revised rule’s “escalator provision,” automatically increasing the salary threshold every three years, violates the federal rulemaking requirement for notice and comment periods before changes can be made. U.S. Labor Secretary Thomas Perez promised to vigorously defend the new rule. it is far from certain that these legal challenges will succeed in delaying the new rules. Accordingly, we recommend that LSA members continue to prepare for implementation. Read more from Politico.
Congress Recesses for the Political Conventions, Expected to Consider DOL Delay Measures this Fall
July 25, 2016 - Congress recessed early for the political conventions and will not return to Washington, DC until after Labor Day to face a daunting to-do list before adjourning for the November elections. Upon return, Congress is expected to consider several proposals to block or delay the Labor Department's Overtime Final Rule, the regulation that will, among other things, double the salary level that white collar employees must be paid in order to be exempt from overtime pay. There are currently four alternative proposals in Congress: a resolution of disapproval under the Congressional Review Act sponsored by 44 Republican Senators, a bill to block implementation, an appropriations rider in the House, and a new bill from four Democratic Representatives (HR 5813) that would phase in the increase over three years. Since it is unlikely that the President will sign any such legislation or that Congress will be able to muster the two-thirds vote in each chamber to override his presumed veto, LSA members are well advised to take steps to implement the new requirements that go into effect on December 1, 2016. Read more from the National Council of Nonprofits.
House FY17 Labor-HHS Appropriations Bill Seeks to Block DOL Overtime Rule Implementation
July 15, 2016 - The House Appropriations Committee on Wednesday passed a FY17 funding bill that would block the Labor Department from using any money to implement its final Overtime rule. The draft measure funds programs within the Department of Labor, the Department of Health and Human Services, the Department of Education and other related agencies (Labor-HHS). Despite Committee approval, the bill is not expected to gain much traction. Though it would likely pass the House should it come up for a vote, its controversial provisions - including this one - would be more than enough to stop Senate Democrats from supporting the measure. The upper chamber approved its FY17 Labor-HHS bill last month; it does not contain language to block the DOL rule’s implementation. Read more about the FY17 appropriations process from LSA.
House Bill Introduced to Delay Full Implementation of DOL Overtime Rule
July 14, 2016 –Today, Representative Kurt Schrader (D-OR) introduced the Overtime Reform and Enhancement Act (H.R. 5813), which would phase in the new salary threshold of the Department of Labor (DOL) Overtime final rule over three years and eliminate future automatic salary threshold updates. The legislation as introduced would phase in the increases, starting at $692/wk in 2016, $765/wk in 2017, and $839/wk in 2018 before increasing to $913/wk in 2019. It would also require new rulemaking for any increases past that level, nullifying the DOL's regulation that created a mechanism to increase the threshold automatically every three years. Read more from ANCOR.
Nationwide Survey Points to Need for Adjusting Government-Nonprofit Grants/Contracts to Accommodate Changes to Federal Overtime Rules
July 5, 2016 - A new nationwide survey by the National Council of Nonprofits found that, while nonprofit organizations support fair labor standards and paying workers overtime, the new federal overtime rules will force many performing services for the public pursuant to government grants and contracts to reduce staff and cut back on services unless governments take steps to revise written agreements to either adjust performance requirements or pay nonprofits for the extra mandated costs. Building on prior research that has demonstrated the damaging effects of governments not paying nonprofits for the full costs of contracted services, this new survey of nonprofits with government grants and contracts illustrates the effects that increasing those costs will have on nonprofits’ abilities to deliver services. Read more and download the report here.
Breaking down your nonprofit's obligation to pay overtime under the new federal rules
June 22, 2016 – To help nonprofits comply with the new Overtime Final Rule, the National Council of Nonprofits has compiled resources proven experts to develop a multi-step compliance analysis – full of useful flowcharts, straightforward worksheets, and other tips. Learn more from the National Council of Nonprofits.
Reopening Government Grants and Contracts to Address Overtime Rule Costs
June 13, 2016 - How can a nonprofit maintain service levels as required by current government grants and contracts when its costs are likely to increase - due to the overtime pay final rule - but reimbursement rates are not? The Labor Department, in its materials explaining the change in employment rules, seemed to acknowledge the challenge for “organizations for which some or a significant amount of funding comes from government or private grants of set amounts.” DOL has offered assurances that future grants and contracts from that federal agency will adjust reimbursement rates to recognize the new overtime requirements. It was also revealed at a congressional hearing last week that National Research Service Award grants from the National Institutes of Health will reportedly pay above the new salary threshold for college and university research activities. Other federal departments and agencies may announce relief for future, and perhaps current, grants and contracts, but so far no clear path has emerged to identify tools or procedures to follow, and relief will still be needed for non-federal government grants and contracts.
In the meantime, the Venable law firm recommends that nonprofits with government grants and contracts “reach out to their grants and/or contracting officer as soon as possible to determine how the nonprofit can formally modify the grant and/or contract budget to account for these new costs.” The advice continues with the reminder that “any increase should be reflected in a formal modification to ensure that the federal government acknowledges the increase, or corresponding limitation in scope, and does not result in an adverse response by the government.” Read more from the National Council of Nonprofits.
House Committee on Education and the Workforce Holds Hearing on Overtime Rule
June 10, 2016 - During a June 9 hearing titled, “The Administration’s Overtime Rule and Its Consequences for Workers, Students, Nonprofits, and Small Businesses.” Testifying at the hearing were Jared Bernstein, Senior Fellow at the Center on Budget and Policy Priorities; Alexander J. Passantino, Partner at Seyfarth Shaw LLP; Michael Rounds, Associate Vice Provost for Human Resource Management at the University of Kansas; and Tina Sharby, Chief Human Resources Officer at Easter Seals New Hampshire, testifying on behalf of the Society for Human Resource Management (SHRM). The archived hearing and written testimony is available here.
Senators Introduce Resolution to Block Overtime Rule
June 7, 2016 – Today, Senators Lamar Alexander (R-TN) and Ron Johnson (R-WI) introduced a resolution to block the Department of Labor’s final overtime rule under the Congressional Review Act (S.J. Res. 34). The resolution would nullify the final rule if passed, and prohibit the Administration from issuing a substantially similar rule without congressional approval. It is almost certain President Obama would veto the resolution. At the time of introduction, the resolution had 44 cosponsors, all Republicans. Read more from Sen. Alexander. Since it is unlikely that the President will sign any such legislation or that Congress will be able to muster the two-thirds vote in each chamber to override his presumed veto, LSA members should continue plans to implement the new requirements that go into effect on December 1, 2016.
Senate Spending Bill Won’t Include Rider to Block Overtime
June 6, 2016 - The Senate’s bill to provide funding for the Labor Department in FY17 won’t include a rider to defund the agency’s recently finalized overtime pay rule. According to one Republican aide, the Senate Appropriations subcommittee on Labor, Health and Human Services, Education and Related Agencies won’t contain a policy rider in the base text. However, the language could be introduced as an amendment. Including such language would likely draw a strong rebuke from Senate Democrats and the Obama administration, which has threatened to veto appropriations bills that include controversial policy riders. The Senate Appropriations subcommittee is scheduled to mark up the legislation on Tuesday, and the full committee will consider the measure on Thursday. Read more from Morning Consult.
Save the Date! Webinar on Nonprofit Compliance with Federal Overtime Rules
**Update! Archived Webinar Materials are Now Available Here**
May 19, 2016 - Anticipating the release of the final overtime rule, LSA has been working with Independent Sector and the Department of Labor to create a digital learning series about nonprofit compliance with the Fair Labor Standards Act (FLSA), the federal law that establishes minimum wage, overtime pay, recordkeeping, and child labor standards affecting full and part-time workers. The first webinar, “Is Your Organization In Compliance with the FLSA?”, will take place on Tuesday, May 24, from 1:00 – 2:00 PM Eastern. DOL officials will lead an exclusive training session for the nonprofit community that will clarify federal overtime rules, help you determine which employees they may affect, and provide you with information for determining if your organization is in compliance. Learn more and register here.
LSA Analyzes DOL’s Final Overtime Pay Rule
May 18, 2016 – Earlier today, DOL issued its much-anticipated final overtime rule. To help inform and facilitate LSA member engagement around these important changes, we have released an executive summary and preliminary analysis of the final rule, focusing on (1) The New Requirements, (2) The Non-Enforcement Policy, and (3) Next Steps. The full analysis is vailable here, and will be updated as we continue to review the final rule.
Final Overtime Pay Rule Released
May 18, 2016 - The Obama administration just unveiled a new rule designed to increase the number of workers who are eligible to receive overtime pay. The regulations will let salaried employees earn overtime if they make up to $47,476 a year, more than double the current annual salary threshold of $23,660. In so doing, the final rule sets the white collar exemption threshold at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the South. This is slightly below the $50,440 level DOL proposed last July, which was instead tied to the 40th percentile of full-time salaried workers nationally. To keep pace with inflation, this new threshold will be updated every three years, instead of annually as DOL had originally proposed.
The effective date of the final rule is December 1, 2016. This means employers will have 180 days to comply with the changes. There is one exception, as DOL is implementing a time-limited non-enforcement policy for providers of Medicaid-funded services for individuals with intellectual or developmental disabilities in residential homes and facilities with 15 or fewer beds. This non-enforcement period will last from December 1, 2016 to March 17, 2019, and was incorporated in part at the behest of HHS, which expressed concerns about the final rule’s impact on this subset of employers, who are heavily Medicaid reliant and simultaneously working to implement CMS’s HCBS settings rule. This policy, also released today, is available here.
LSA is in the process of analyzing the 500+ pages of the final rule and will release additional information becomes available. We will make our forthcoming analysis and other materials available via this page, email, and social media.
DOL Releases Guidance, Other Resources on Eve of Final Rule
May 17, 2016 - Hours before the scheduled release of its final overtime pay rule, DOL unveiled several new resources and guidance documents, confirming some of the forthcoming changes. Read more from DOL.
Obama Administration to Unveil Final Overtime Rule Wednesday
May 17, 2016 – According to several media reports, the Labor Department will release its final overtime pay rule tomorrow. The rule is said to increase the white collar exemption threshold to approximately $47,500 - $500 more than previously reported, and $3,000 below the threshold DOL proposed last July. This threshold would be updated every three years, though it is not yet known if these updates would be fixed or tied to another mechanism, such as an inflation index. Although DOL considered changing duties test used to determine whether people over the salary threshold qualified for overtime, according to reports, the Department ultimately decided to leave the test as-is. The final rule is expected to have an effective date of December 1, 2016. While we don’t know exactly what time tomorrow the rule will be posted, it will be available online here once it is made public. Also tomorrow, Vice President Biden, Labor Secretary Tom Perez, and Sen. Sherrod Brown (D.-Ohio) will highlight the rule’s release at an event in Columbus, Ohio. Read more from Politico.
Media Reports: Final Rule Out Wednesday
May 16, 2016 – Though the publication date of the final rule is not known outside the federal government, media outlets are now reporting that the Administration plans to unveil the rule on Wednesday, May 18 at an event in Columbus, Ohio featuring Vice President Biden, Labor Secretary Tom Perez, and Sen. Sherrod Brown (D-OH). Check out our updated FAQ for the latest on what to expect and when to expect it.
DOL Final Overtime Rule Imminent – The Latest on Content and Timing
May 13, 2016 - Any day now, the Department of Labor is expected to issue its final overtime pay rule. Designed to increase the number of workers who are eligible to receive overtime pay by raising the annual white collar exemption threshold, the rule will have significant implications for LSA members and nonprofits across the country. Check out LSA’s new FAQ for the latest on the content and timing of the final rule, as well as what you can expect from LSA in the coming weeks. Click here to access the FAQ.
Senate Holds Hearing on DOL Proposed Overtime Regulations, Nonprofit Voice Among Panelists
May 11, 2016 – This morning, the Senate Committee on Small Business and Entrepreneurship held a hearing entitled, “An Examination of the Administration’s Overtime Rule and the Rising Costs of Doing Business.” During the hearing, Members heard from various small business and nonprofit leaders regarding the potential impacts of the proposed overtime pay rule. Witnesses included Nancy Duncan, Associate Vice President of Human Resources for the international medical charity Operation Smile. Ms. Duncan noted that “While all employers will feel the impact of such a drastic change, there will be a tremendous negative impact on non-profit organizations…[w]e have made tremendous efforts over the years to align our salaries to be more competitive with the for-profit space. Yet still, this proposed update will increase our payroll cost by nearly $1 million annually affecting over 50 percent of our workforce. This is not a financial cost we can absorb. Considering that a cleft lip surgery costs an average of $240, this would mean nearly 4,200 fewer surgeries provided globally each year.” The submitted testimony and hearing webcast is archived here.
New Resources! DOL Proposed Rule Session at LSA Annual Conference
May 3, 2016 – Last week, the LSA 2016 Annual Conference brought together over 350 nonprofit and faith leaders to build on and celebrate LSA's national, strong, and trusted network. Sessions included a focus on the Department of Labor’s (DOL) proposed overtime pay rule, which could be finalized this month!
During the DOL session, Minnesota-based attorney Jewelie Grape, Partner at Conner & Winters LLP, reviewed the current Fair Labor Standards Act requirements for nonprofit employers and DOL’s proposed changes, including considerations and next steps for LSA members. Linda Timmons, President and CEO of Mosaic, and Jessica Thomasson, President and CEO of Lutheran Social Services of North Dakota, then discussed the projected impact of the proposed rule on their organizations, as well as possible compliance options. Many thanks to our wonderful panelists for sharing their expertise and experience!
In case you missed the session or would like to learn more, we’ve made the presentation available online here, along with other exclusive resources from the LSA 2016 Annual Conference. You can also access the session materials directly, by clicking here for the Power Point, here for the Compliance Planning Checklist, and here for Mosaic’s policy brief on the overtime threshold.
Labor Department May Lower Proposed Overtime Threshold
April 29, 2016 - The Labor Department will lower the salary threshold in its forthcoming final rule to extend overtime coverage, according to Politico. The new threshold under consideration is $47,000, according to sources familiar with the Labor Department's deliberations. The overtime salary threshold determines the level below which virtually all salaried employees qualify for time-and-a-half pay if they work more than 40 hours in any given week. The threshold was $50,440 in the rule as proposed in July. A $47,000 threshold would be almost exactly double the current threshold, which lies below the poverty line for a family of four. The final rule is expected in mid-May. Read more from Politico.
LSA Meets with White House, DOL Officials on Proposed Overtime Changes
April 18, 2016 – Today, LSA’s Director of Public Policy and Advocacy, Lindsey Copeland, met with staff from the Department of Labor (DOL), and the White House, including the Office of Management and Budget (OMB), to discuss DOL’s proposed overtime pay rule. The rule is currently under review at OMB - a final step in the lengthy regulatory process - and outreach to the agency is a critical advocacy touchpoint. During the meeting, we expressed both our appreciation for DOL’s well-intentioned effort to increase the number of workers who receive overtime pay, as well as our concerns with the proposal as written. In particular, while we agree with the Administration that it is important to ensure the regulations governing overtime protections keep pace with the evolving workplace and economy, we are cognizant of the significant impacts this drastic new wage and compensation structure would have on LSA member organizations and the individuals, families, and communities they serve. Though OMB is legally prohibited from discussing the content of the final rule before it is released, the meeting was quite productive. Administration officials were receptive to our analysis and insights, and requested follow up impact data, which we will be submitting shortly. Though the meeting went well, we have no indication the final rule will reflect the changes we originally recommended in our September 4 comment letter and reiterated today. Accordingly, we encourage all LSA members to continue their implementation planning based on the proposed rule.
DOL Rule to be in Focus at LSA Annual Conference
April 5, 2016 - The Department of Labor (DOL) proposed rule to increase the number of workers who are eligible for overtime pay will have significant implications for LSA members and nonprofits across the country. Join us at the 2016 LSA Annual Conference to learn what these changes could mean for your agency, how other LSA members are planning for implementation, and what you can do now to prepare. Together, we will explore best practices and work to identify innovative strategies for success amid an evolving nonprofit workplace. As a community-based provider, you won’t want to miss this session!
Panelists include Linda Timmons, President and CEO of Mosaic; Minnesota-based attorney Jewelie Grape, Partner at Conner & Winters LLP; and Jessica Thomasson, President and CEO of Lutheran Social Services of North Dakota. Session A4: Planning for Change: DOL’s Proposed Overtime Pay Rule will be held on Tuesday, April 26, from 2:45 – 4:15 PM. Learn more, and register today!
Please note, registration online closes this Friday, April 8. After this time, you can still register on site at the Hilton Minneapolis, April 25-28. One- or two-day and group registration rates are available.
DOL’s Overtime Rule Could be Final Sooner than Expected
March 14, 2016 - Yesterday, the Department of Labor (DOL) sent its proposed overtime pay rule to the Office of Management and Budget (OMB) for review, a final step in the federal regulatory process. OMB review typically takes between 30 – 90 days, which would mean the final rule could be made public this spring. Previously, the final rule wasn’t expected until July. Read more from the Society for Human Resource Management.
DOL Slates July Release of Final Overtime Rule
November 23, 2015 - The Department of Labor (DOL) is now targeting a July 2016 release of its overtime pay rule, according to the Fall 2015 semiannual regulatory agenda, published by the Office of Management and Budget on November 19. The DOL's Wage and Hour Division is in the midst of reviewing nearly 300,000 comments received on the proposed rule, which would update the Fair Labor Standards Act by more than doubling the minimum salary for the overtime exemption to $50,440 per year from $23,660. Read more from BNA.
Advocacy Alert! LSA Launches DOL Ovetime Pay Rule Toolkit
October 28, 2015 - This summer, the Department of Labor (DOL) released a long-awaited proposed rule intended to increase the number of workers who are eligible for overtime pay by raising the white collar exemption salary threshold from $23,660 to $50,440. With a final rule expected in 2016, LSA member advocacy efforts are more important than ever! To help you educate your legislators and policymakers on the proposed rule’s impact in your state or district – as well as on the need for adequate implementation funding - LSA has created this Overtime Pay Rule Toolkit.
LSA Webinar Recording and Slides Now Available
September 23, 2015 – On September 18, LSA was joined by experts from Independent Sector and ANCOR who reviewed DOL’s proposed rule, discussed its impact on nonprofits and community-based providers, and highlighted opportunities for LSA members to prepare for a final rule and anticipated 2016 implementation date. The materials from this webinar, including a recording and power point presentation, are now available for LSA members to review. To access the recording, please click here. Please note that you will need to enter your name and email address to view the recording. The slides (PDF) are available here.
Join LSA Webinar on the DOL Overtime Pay Proposed Rule!
September 10, 2015 - DOL's proposed changes to the existing overtime pay regulations could have a significant impact on LSA members. On September 4, the Department officially closed its public comment period, keeping the agency on track to issue a final rule with a 2016 implementation date. With these sweeping changes on the horizon, what can LSA members do now to prepare? What exactly is in the proposed rule? What are the implications for nonprofits and providers? Join LSA on September 18 from 1:00 - 2:00 PM Eastern to find out! Presenters include Allison Grayson, Director of Policy Development and Analysis at Independent Sector, who will discuss the nonprofit sector's perspective and next steps; Katherine Berland, Director of Public Policy at the American Network of Community Options and Resources (ANCOR), who will review the potential impacts of the proposed rule on community-based providers and those they serve; and Lindsey Copeland, LSA's Director of Public Policy and Advocacy, who will highlight LSA's resources and moderate a Q & A session at the end of the presentations. Register here.
LSA Submits Comments on DOL Proposed Rule
September 8, 2015 - On September 4, LSA submitted comments to DOL on its proposed overtime pay regulation. Our comments are framed by the overarching concern that though well-intentioned, the Department’s proposed rule may inadvertently harm the very individuals and families it seeks to protect. That is, by not linking the rule’s new wage requirements to enhanced government reimbursement rates, DOL is imposing significant employer obligations without ensuring funding is available for implementation. Given the reliance of many providers on government financing, this disconnect may render nonprofit providers unable to comply without having to reduce staff, wages, services – or all three. Accordingly, without corresponding government program rate increases to cover its increased costs, the proposed rule may have severe negative consequences for community-based, nonprofit providers and those they serve and employ.
In our comment letter, we make recommendations for minimizing this disruption, such as requiring adequate government funding, setting the increase at a more reasonable percentile, and accounting for geographic variances in establishing the threshold. We also respond to the Department’s request for input on its proposal to automatically adjust the salary level on an annual basis. Further, we highlight the unintended consequences these changes could have on worker satisfaction, address non-salary benefits, propose an implementation timeline, and respond to the Department’s request for input on the existing duties tests. LSA’s comments are available here.
LSA Announces Webinar Opportunity: Changes Coming to DOL Overtime Pay Rules - Next Steps for LSA Members
September 4, 2015 - This summer, the Department of Labor (DOL) released a long-awaited proposed rule intended to increase the number of workers who are eligible to receive overtime pay by raising the white collar exemption annual salary threshold - currently $23,660 - to $50,440 in 2016. The proposed rule would also establish a mechanism to automatically update the salary level each year.
Notably, these changes are not effective immediately, but are draft recommendations subject to the federal rulemaking process. Accordingly, the Administration must take a number of additional steps before issuing final regulations that make changes to the current overtime rules. DOL has not yet announced when a final rule might be released, but experts agree the agency is on track for a 2016 implementation date. With these sweeping changes on the horizon, what can LSA members do now to prepare? How will these changes impact your organization? What exactly is in the proposed rule? Join LSA for a webinar on Friday, September 18 at 1 PM Eastern to find out! Learn more and register here.
DOL Denies Requests for Comment Period Extension
September 2, 2015 - This week, the Department of Labor responded to Chairman Kline, denying his request for an extension of the current comment period. In a letter made public on September 1, Dr. David Weil, Administrator of DOL’s Wage and Hour Division, wrote ‘we believe a 60-day comment period provides sufficient time for interested parties to submit substantial comment.’ He also stated that coupled with DOL’s outreach and engagement efforts, the 60-day comment period will ensure ‘the Department has the level of insight from the public needed to produce a quality regulation.’
House Republicans Ask DOL to Extend Comment Period
August 21, 2015 - On Friday, a group of 21 Republican lawmakers, led by Rep. John Kline (R-Minn.), Chairman of the House Committee on Workforce and Education, and Rep. Tim Walberg (R-Mich.), Chairman of the Subcommittee on Workforce Protection, sent a letter to Secretary of Labor Tom Perez, requesting a 60 day extension of the overtime pay proposed rule comment period. The letter states the additional time is necessary “so the public has sufficient time to evaluate the proposal and provide thoughtful comments. The lawmakers also express concern over “the NPRM’s ambiguity over the duties test,” and request DOL clarify if it intends to make changes to the duties test and if the public will be provided notice and the opportunity for comment.
New LSA FAQ on Proposed Overtime Pay Rule
August 6, 2015 - To help inform and facilitate LSA member engagement around DOL’s proposal, the LSA Public Policy and Advocacy office has compiled a preliminary set of FAQs, focusing on several key areas of the proposed rule of importance to LSA members, including: Background, The Salary Threshold, The White Collar Exemption, Specialized Considerations, and Next Steps. We will update this information regularly, and encourage you to reach out to Lindsey Copeland, LSA's Director of Public Policy and Advocacy with any questions, suggestions, or feedback you may have. Read more about the proposed rule and LSA’s response.
LSA, LSA-DN Request More Time for Overtime Proposal Comments
August 5, 2015 - On August 5, LSA and LSA-DN sent a letter to the Department of Labor, requesting at least a 60-day extension of the public comment period for the proposed rule revising overtime pay regulations. Given the potential impacts on our members and the individuals, families, and communities they serve, we believe more time is needed to fully understand and articulate the implications of the proposed changes. “We appreciate that the Department’s proposal is well–intentioned, designed to increase the number of workers who receive overtime pay,” the letter states, “Our request for a delay in the comment period is similarly well–intentioned, put forth with the earnest hope that additional time will allow our members to provide the Department with meaningful, carefully-examined input and analysis.”
Nonprofits Seek 60 Day Extension of DOL Overtime Comment Period
August 5, 2015 - On June 30, 2015, the Department of Labor (DOL) released a proposed rule that would revise regulations governing overtime compensation related to the Fair Labor Standards Act (FLSA). Specifically, the proposed rule would increase the salary threshold below which employees qualify for overtime compensation, impacting an estimated 4.5 million employees in the United States, including many working in the nonprofit sector. LSA joined Independent Sector, the National Council of Nonprofits, and 145 organizations from across the charitable and philanthropic sector in a letter to the Department of Labor on August 5, 2015, requesting a 60-day extension of the public comment period for the proposed rule revising overtime pay regulations.
Senators Ask DOL to Extend Comment Period for Overtime NPRM
July 25, 2015 - On July 24, 2015, 10 Republican Senators wrote Secretary of Labor Thomas Perez, seeking an extension of the comment period on the Department’s proposed overtime rule. Led by Sens. Lamar Alexander (R-Tenn.), Mike Enzi (R-Wyo.), and Johnny Isakson (R-Ga.), the Senators note in the letter that the “current 60-day comment period is simply inadequate to properly evaluate DOL’s proposal….[t]herefore, we encourage the Department to allow full public participation in the rulemaking process by extending the comment period for its NPRM by a minimum of 60 days.”
Also signing the letter were Sens. Bill Cassidy (R-La.), Susan Collins (R-Maine), Orrin Hatch (R-Utah), James Lankford (R-Okla.), Lisa Murkowski (R-Alaska), Pat Roberts (R-Kan.) and Tim Scott (R-S.C.). The letter is available here.
House Holds Hearing on DOL Proposed Overtime Regulations
July 24, 2015 - Three weeks after the U.S. Department of Labor published its proposed overtime regulations, sharp differences of opinions appear to be forming, as indicated by testimony at a July 23 House Committee on Education and Workforce hearing. The draft regulations would increase the minimum salary level that employers must pay their white-collar employees from $23,660 to $50,400 per year to exempt them from time-and-a-half overtime pay. The proposal would also raise the minimum salary level for “highly compensated employees” from $100,000 to over $120,000 per year, and possibly establish a mechanism for automatically raising these salary levels in the future.
During the hearing, small business owners and other opponents raised concerns about the cost of the proposal to employers and expressed their views on the resulting limitations on employee opportunity and flexibility. Supporters maintained that the proposal would reduce excessive work hours for some employees, raise wages for others, and create jobs. The submitted testimony and hearing webcast is archived here.
Department of Labor Proposes Expansion of Overtime Protections
July 6, 2015 - The U.S. Department of Labor has proposed sweeping new regulations designed to expand overtime protections for millions of workers employed by nonprofits, for-profits, and governments. The draft regulations, which will not go into effect (if at all) until after a period of public comment and analysis, would more than double the minimum salary level that white-collar employees must be paid (from $23,660 to $50,400) to exempt them from overtime pay. The Labor Department is also proposing raising the minimum salary level for “highly compensated employees” from $100,000 to over $120,000 per year, and seeking comments on whether the government should establish a mechanism for automatically raising these salary levels in the future. Comments are due here by September 4, 2015.
- LSA's analysis of the proposed rule, LSA FAQ: The Proposed Overtime Pay Regulations
- LSA and LSA-DN's request for a 60-day extension of the current comment period is available here.
- LSA's comment letter is available here.
- LSA's September 18 webinar, Changes Coming to DOL Overtime Rules, Next Steps for LSA Members
- LSA's DOL Overtime Pay Rule Toolkit is available here
- LSA's Compliance Planning Checklist
- Power Point presentation from the 2016 LSA Annual Conference
- LSA FAQ: The Latest on Content and Timing
- LSA's Preliminary Analysis of DOL's Final Overtime Rule NEW!