On July 26, the U.S. Department of Labor (DOL) formally published a Request for Information (RFI) on the 2016 changes to the Fair Labor Standards Act (FLSA) overtime regulations. In line with AGC’s regulatory recommendations, this RFI is the first step the DOL is undertaking to revisit the overtime rule that dramatically increased the salary threshold for exempt employees. AGC and its members were concerned that imposing such a large and immediate increase might result in unintended consequences, particularly for small construction companies, construction employers in lower‐wage regions, and construction personnel.
In 2016, the DOL released a final rule implementing changes to the overtime regulations. The most significant change was a doubling of the standard salary threshold for exempt employees – from $455 per week ($23,660 per year) to $913 per week ($47,476 per year). The changes were set to take effect on Dec. 1, 2016, but a district court in Texas blocked the Obama administration's rule. In its decision, the court noted that DOL, by setting the salary threshold so high in the rule, improperly made it the primary focus in determining whether an employee is exempt. The Trump administration abandoned the Labor Department's initial appeal of the court striking down the salary threshold, but appealed the decision's conclusion that the DOL did not have the authority to set a salary threshold to determine whether an employee qualifies for exemption.
Still awaiting the court’s decision, the DOL ultimately decided to go forward and seek public input on the rule now to assist in the development of a future notice of proposed rulemaking (NPRM). Specifically, the RFI requests comments on questions related to the salary level test, the duties test, inclusion of non-discretionary bonuses and incentive payments to satisfy a portion of the salary level, the salary test for highly compensated employees, and automatic updating of the salary level tests. The deadline to submit comments is September 25, 2017.
AGC will continue to provide input to the DOL on the impact further changes might have on the construction industry and will notify members of any developments.
For more information, contact Claiborne Guy at claiborne.guy@agc.org or 703-837-5382.