Earlier this month, the Labor Department’s overtime rule was sidelined after a federal judge in Texas ruled that the salary threshold set for overtime eligibility was excessively high. The U.S. District Court for the Eastern District of Texas decision marked a big win for small business because the Obama-era rule would have raised costs for small business owners.
Now, the overtime rule is positioned for its next phase, according to Bloomberg BNA. The Department of Labor has invited stakeholders to comment on eligibility requirements for the overtime rule by issuing a Request for Information in July, and the deadline to submit is quickly approaching.
Monday, September 25, at 11:59 p.m. is the official cut-off to provide input on the salary threshold and its damage to small business expenses and operations.
Although the Texas decision was a victory, small business owners aren’t out of the woods yet. The Department of Labor could take these public comments and craft a new regulation that still increases the salary threshold for those exempt from overtime pay above its current rate of $23,660, according to JD Supra. The Labor Department under the Obama administration raised the salary threshold to $47,476, and this was the amount deemed unreasonably high by the U.S. District Court for the Eastern District of Texas.
So, a proposed salary threshold under this amount could still be ruled acceptable for determining if an employee is exempt or eligible for overtime pay. Labor Secretary Alexander Acosta has hinted that the Labor Department may increase the salary threshold to the low $30,000 range in a revised overtime rule, according to Bloomberg BNA.
On September 1, NFIB sent a recommendation to the Department of Labor suggesting that the Justice Department evaluate the overtime rule proposal before raising the salary threshold. According to NFIB, 44 percent of small business owners had one employee—at the minimum—who would have been eligible for time-and-a-half pay under the previously proposed rule.
With the closing of the public comment period next week, small business owners should prepare to see more deliberations over a rewrite of the overtime rule.
Meanwhile, NFIB will continue to advocate against harmful regulations to small business.