Paul DeCamp Quoted in “Proposed Change in Overtime Threshold Likely to Face Challenges”

The U.S. Department of Labor is proposing increasing the threshold below which employers must pay their salaried workers overtime, but its implementation is unlikely to proceed smoothly, experts say.
A 2016 Obama administration proposal was blocked by a federal judge and never implemented, and many anticipate a similar scenario may unfold this time around. …

Under the Biden administration proposal issued Aug. 30, employees who earn less than $1,059 a week, or about $55,000 per year, would be eligible for overtime. The DOL estimates the change will impact 3.6 million workers.

That compares with the $684 per week, or $35,568 per year, standard that took effect in January 2020 during the Trump administration.

The proposal also calls for automatically updating the salary threshold every three years to reflect current earnings data.

It does not address the complex duties requirement under the FLSA, which, for instance, exempts employees who may be required to supervise others. …

Some observers say the provision requiring an automatic escalation may pose more of an obstacle for the proposal’s implementation than the salary cutoff.

Experts point to last year’s ruling by the U.S. Supreme Court in West Virginia v. Environmental Protection Agency, in which the majority opinion said that under the “major questions doctrine” the agency went too far in its attempt to regulate without Congress’ explicit permission. …

“A lot depends on which court it ends up in,” as well as the outcome of the 2024 federal elections, said Paul DeCamp, a member of Epstein Becker & Green in Washington. If the president is re-elected, “it gives the department a lot more time to proceed.

If not, and the regulation is not first finalized and enforced, “one then would expect to see the next administration pull back” and possibly repeal it, he said.