August 2023 Is Latest Target for DOL's Overtime and Independent Contractor Rules

Author: Michael Cardman, HR & Compliance Center Senior Legal Editor

June 15, 2023

The US Department of Labor (DOL) now plans to propose a new overtime rule and finalize its independent contractor rule in August.

The self-imposed deadlines were released recently as part of the agency's public agenda.

The Overtime Rule

The long-anticipated overtime rule originally had been scheduled for April 2022, then was delayed until October 2022 and delayed again until May 2023.

Further delays are possible, but each delay will make it more difficult for the Biden administration to defend the rule from an expected legal challenge. Conversely, there is nothing stopping the DOL from issuing a new rule before its target dates.

The repeated delays have fueled speculation that the DOL is considering significant changes, such as a substantial increase in the minimum salary threshold for overtime-exempt employees, annual inflation adjustments for the minimum salary and/or changes to the duties tests.

After a new overtime rule is proposed, the public will have at least 30 days to comment on it before the DOL can issue a final rule. Then the final rule would take effect no sooner than 60 days after it is published in the Federal Register, assuming it is classified as a major rule.

The Independent Contractor Rule

Last October, the DOL proposed a new independent contractor rule that would establish a version of the "economic realities test" as the standard for determining whether a worker is an employee or an independent contractor under the FLSA.

More than 54,000 people submitted comments on the rule. The DOL promised to consider this feedback and may make changes to its draft rule before publishing a final version.

In a recent legal filing, the DOL suggested it would finalize a new independent contractor rule no later than October.

As with the overtime rule, the final independent contractor rule would take effect no sooner than 60 days after it is published in the Federal Register.