DOL Pencils in May 2023 for New Overtime and Independent Contractor Rules

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

January 9, 2023

The US Department of Labor (DOL) is planning for a busy springtime.

Its latest regulatory agenda lists May 2023 as the target date for two key Fair Labor Standards Act (FLSA) developments: a proposed overtime rule and a final independent contractor rule.

It remains to be seen whether the DOL will follow its own timeline, however. The agency already has missed its target for the overtime rule twice. The overtime rule was first slated for April 2022 and then for October 2022, so another delay would not be unusual. Conversely, there is nothing stopping the DOL from issuing new rules before its target dates, either.

The Overtime Rule

The DOL's new overtime rule is expected to raise the minimum salary for most overtime-exempt employees and possibly update the duties tests as well.

The agency took meetings and held online listening sessions with stakeholders last year.

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 need to 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.

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.