Earlier this year, the Department of Labor (DOL) issued a new proposed overtime regulation. The regulation, which had been anticipated since last year, comes after the Obama Administration overtime rule was struck down in a Big “I”-supported lawsuit. The Big “I” was the only insurance trade association to join the lawsuit.
The new Trump Administration DOL proposal would increase the minimum salary level threshold for overtime-exempt employees from $23,660 per year, or $455 per week, to $35,308 per year, or $679 per week. This amount is roughly an inflationary increase. In addition, in the new proposal, nondiscretionary bonuses and incentive payments, including commissions, paid at least on an annual basis, could satisfy up to 10% of the threshold. The last time the DOL increased the threshold was 2004. The previous rule proposed by the Obama Administration sought to make the threshold $47,476—a much higher increase than warranted by inflation.
The previous rule also included a mechanism for automatically updating the overtime-exempt employee salary threshold for inflation. The Big “I” opposed this as it was too burdensome for small businesses and beyond the statutory authority of the DOL. It was also a point of contention in the litigation. The new draft rule does not include automatic updates, but the proposal did seek comment on conducting regularly scheduled rulemakings to update the salary threshold.
In response to the new proposed regulation, the Big “I” submitted a letter to the DOL highlighting issues the DOL should consider related to independent insurance agents and brokers but also acknowledged the proposal is a significant improvement over the 2016 rule. The Big “I” also submitted a letter as part of the Partnership to Protect Workplace Opportunity (PPWO). The PPWO consists of a diverse group of associations, businesses, nonprofits and other stakeholders representing employers with millions of white-collar employees across the country in almost every industry that were or would have been affected by the 2016 rule.
Wyatt Stewart is Big “I” senior director of federal government affairs.
