Dive Brief:

• The U.S. Department of Labor (DOL) has added to its spring 2019 regulatory agenda a proposed rule that would revise the Fair Labor Standards Act's (FLSA) regulations on calculating overtime pay for workers with fluctuating workweeks.
• Under the FLSA, employers are permitted to use an alternative method of overtime pay calculation for employees whose hours fluctuate from week to week. Essentially, employers may use a fixed salary from which to determine such an employee's regular rate, and this rate is then used to calculate the time and one-half overtime pay rate for that employee, according to federal law. DOL said this method isn't available to employers who pay employees bonuses or other incentive-based pay, however, and the agency is looking to revise the regulations to provide "greater flexibility" to employers.
• DOL didn't list an anticipated date for the proposed rule, but it did indicate it would publish a Notice of Proposed Rulemaking to the Federal Register in the future. The proposal would be subject to a public comment period after being published.

Dive Insight:

DOL has set itself to work producing a number of proposed changes to the FLSA, the most significant of them being the agency's update to overtime eligibility thresholds. Under DOL's proposal, the salary threshold for overtime eligibility would be increased to $35,308 per year, affecting more than one million employees.

DOL has also proposed changes to the calculation of workers' regular rate of pay in order to clarify which payment forms can either be included or excluded in that calculation. Experts who spoke with HR Dive said that proposal could reduce the amount of overtime pay to which workers are entitled, but it could also provide incentive for employers to improve their benefits programs. The costs of certain wellness programs and benefits as well as payments for unused paid leave are among items the regular rate of pay rulemaking would allow employers to exclude.

Officials at the agency are reportedly moving fast to bring important rule changes into effect under acting Secretary of Labor Patrick Pizzella, with the overtime rule itself apparently receiving a final review by the White House last week, Bloomberg Law reported. DOL is running against a timeline that some have called "squished" due to the upcoming 2020 federal election cycle, the results of which could lead to an about-face in regulatory activity.