Human Resources News & Insights

Is DOL’s new overtime rule coming sooner than expected?


The buzz out of Capitol Hill is telling employers they’ve got a lot less time to prep for the DOL’s new overtime exemption final rule. 

Just a couple of months ago, the DOL released its fall 2015 regulatory agenda, which stated the agency was targeting a July 2016 release date for the final changes to the rule. But now, that timeline appears to have sped up.

In a new interview with Bloomberg BNA, DOL Secretary Thomas Perez said his agency is “confident we’ll get a final rule out by spring 2016.”

Why the sudden rush?

The Congressional Research Service, a branch of the Library of Congress, may have the answer.

It just released a telling report entitled, “Agency Final Rules Submitted After May 16, 2016, May Be Subject to Disapproval in 2017 Under the Congressional Review Act.”

It details a little-known mechanism by which the next Congress and president may be able to invalidate the DOL’s changes to the FLSA exemption rule, if they don’t arrive soon.

Meet the Congressional Review Act

The Congressional Review Act allows Congress to disapprove “major” final rules promulgated by federal agencies — like the DOL.

A major rule is defined as one that would have an annual effect on the economy of $100 million or more. The changes to the FLSA exemption rules would qualify as major.

The act gives Congress 60 legislative session days to pass a joint resolution that would invalidate any major rule. If the rule is submitted to Congress with fewer than 60 session days remaining on the legislative calendar, then the next Congress will have a similar 60-day period to consider the rule.

And according to the Congressional Research Service, if the DOL’s overtime rule isn’t released by May 16, the rule will be at the mercy of the next Congress and president.

The president can veto any joint resolution passed by Congress to invalidate a major rule — and President Obama would veto such resolution in this case. But if May 16 comes and goes without the new overtime rule being issued, it’ll be out of his hands. And even if a Democrat wins the White House in November, the Congressional Review Act allows a two-thirds vote on the part of Congress to override a presidential veto.

Bottom line: The best chance the Obama administration and current DOL regime has of making their FLSA changes stick is to get them on the books before May 16. Otherwise, there’s a good chance they’ll be shot down if the GOP grabs the White House and maintains the majority in Congress.

It’s worked only once before

To date, only one other rule has been successfully overturned as a result of the act — a 2000 Occupational Safety and Health Administration rule related to workplace ergonomics, according to the Congressional Research Service.

So having the DOL’s final overtime rule overturned would almost be unprecedented. But in this case, it’s easy to envision it playing out that way. If the GOP can muster up a supermajority in November’s presidential election, you can bet the overtime rule will be put to the fire.

The Congressional Research Service did state its May 16 projection could change if the chambers of Congress deviate from the current legislative schedule put forth by party leaders. In other words, if legislative sessions are added to the existing calendar, the DOL would have more time to submit its final rule.

Stay tuned.

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