Nonprofit employers, be aware: the new overtime rules developed by the Department of Labor (DOL) may be finalized very soon. To the consternation of many employers, the proposed regulatory changes significantly increase the minimum annual salary required for an individual to be considered an “exempt employee” (i.e., not eligible for overtime) from the current $22,660 to more than double that amount at $50,440 per year. Employers will thus need to consider making any necessary changes much sooner than originally anticipated, potentially early this summer.
As we reported last November, the DOL had stated that the new salary requirement and other related rule changes would likely not be finalized until at least late 2016. (For background information on the proposed changes and related considerations for nonprofit employers, please see our blog from August 2015.) The extended time frame allowed time for the DOL to sort through the staggering 270,000 public comments, many filed by concerned nonprofits that depend on dedicated employees who are willing to work long hours. Unfortunately for these nonprofits, the DOL has abandoned this expected timeline.
On March 14, 2016, the DOL submitted its final rule to the White House Office of Management and Budget (OMB). The OMB has up to 90 days to review the rule, and may approve the final rule sooner, at which time the new regulations are published in the Federal Register. The rule would not go into effect immediately, as employers are entitled to at least 60 days to comply with the new regulations. If the OMB takes only 30 days to review the rules, they could become effective in mid-June at the earliest.