Seyfarth Synopsis: On December 6, 2023, the Biden Administration announced the release of its Fall 2023 Unified Agenda of Regulatory and Deregulatory Actions. The U.S. Department of Labor’s Wage and Hour Division continues to pursue – with frequent delays – a number of significant rulemakings, including the Division’s proposed increase to the minimum salary level for white-collar exemptions.
While U.S. DOL Wage and Hour Division rulemakings have progressed since the Spring 2023 Regulatory Agenda, many big-ticket items remain in process with uncertain timelines.
For example, the (extended) comment period on the Department’s rule, “Employee or Independent Contractor Classification Under the Fair Labor Standards Act,” closed approximately one year ago on December 13, 2022. But the regulated community has yet to learn how the Department will address insights expressed in more than 55,000 comments to the proposed rule. The current Regulatory Agenda lists November 2023 as the anticipated date for a final independent contractor rule. Discerning readers may note November 2023 is now part of history. In fact, the Biden Administration issued its current Regulatory Agenda in December, which comes after November, so one may wonder why DOL memorialized its latest failure to meet an estimated rulemaking deadline, rather than providing a revised estimate.
The Regulatory Agenda lists April 2024 as the estimated date for release of the final rule on the increase to the minimum salary level for white-collar exemptions. DOL finally published its Notice of Proposed Rulemaking, “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees,” on September 8, 2023. Seyfarth submitted one of the 33,000+ comments received in response to this NPRM, and we see the April 2024 estimate to issue a final rule as . . . ambitious. As you likely know, the rule seeks to increase the overtime threshold from $684 per week ($35,568 per year) to $1,059 per week ($55,068 per year). A footnote explains the threshold could increase, since the final rule will incorporate new wage data. Hurdles the EAP rulemaking may face as it moves toward final form include Congressional Review Act issues, the November 2024 presidential election, and almost-certain litigation challenging the final rule’s validity. For more details on the overtime exemption rule’s substance – and the Firm’s comment – please check out our relevant blog posts here and here.
One impactful rule WHD was able to carry across the finish line recently, “Updating the Davis-Bacon and Related Acts Regulations,” purports to clarify and modernize the DBA’s implementing regulations. The rule went into effect on October 23, 2023, and we blogged about some of the key changes government contractors must address in response. The updated regulations will also impact some employers that do not hold government contracts if they choose to comply with the Act’s prevailing wage and apprenticeship requirements to claim enhanced tax credits under the Inflation Reduction Act. See here and here for thoughts on the IRA and its expected effects.
Employers should anticipate the Division will leverage all of its – limited – resources to achieve the Biden Administration’s wage-hour goals before the end of this presidential term. It takes time to comply with new regulations, so it is prudent for businesses to consider steps they can take now to ensure compliance in the event pending rules become final and binding.
Please connect with the author or your favorite Seyfarth attorney with any questions about wage-hour issues or other compliance concerns.