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Overtime rule arrives at White House, set to undergo review

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The U.S. Department of Labor’s proposed rule to update overtime regulations under the Fair Labor Standards Act has arrived and is pending review, the White House Office of Management and Budget confirmed on its website Wednesday.

OMB’s announcement comes after a series of delays affecting DOL’s overtime rule. The agency initially signaled it would issue a proposal in fall 2022 and held stakeholder listening sessions in anticipation of doing so, a spokesperson previously confirmed to HR Dive, but the year ended without a new overtime rule.

In January, the DOL said it would target May for the proposal. The department’s most recent update pushed publication back to August 2023.

It’s anticipated that DOL will put forth changes to the salary threshold used to determine whether certain white-collar employees are exempt from the FLSA’s minimum wage and overtime requirements. That threshold currently sits at $35,568 per year, a figure set by the Trump administration in 2019.

The 2019 increase represented the first such increase to the FLSA’s overtime threshold in more than a decade, but the $35,576 figure sits below the $47,476 threshold put forth by the Obama administration in 2016 and enjoined by a federal judge that same year.

So far, the Biden administration has not provided a ballpark figure for a new threshold. A 2021 letter to former Secretary of Labor Marty Walsh from congressional Democrats called on DOL to “adopt a salary threshold in line with the historical high point of salary thresholds,” defined as the 55th percentile of earnings of full-time, salaried U.S. workers. That would set the threshold at $82,732 by 2026, according to the letter.

DOL continues to operate without a formal successor to Walsh. Biden nominated Acting Secretary of Labor Julie Su for the job, but Su’s nomination has been held up in the U.S. Senate and has yet to be confirmed.

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