Department of Labor Overtime Rule

Financial Management

On May 18, 2016 the Department of Labor released the final rule (29 CFR Part 541) that would raise the salary threshold at which eligible workers qualify for overtime pay from $23,660 to $47,476 per year. The final rule was scheduled to go into effect on December 1, 2016; however, a judge in Texas suspended the rule.

In 2017, Labor Secretary Alexander Acosta said the salary threshold proposed by the department under the Obama administration was excessive and too burdensome on many employers. The Obama-era rule would have doubled (to $47,476) the salary threshold under which virtually all workers are guaranteed overtime pay if they work more than 40 hours per week. Acosta has suggested, however, that the current minimum salary level of $23,660 should be updated, and the DOL’s request for comments is considered to be a first step in the agency’s plan to revise the regulations. The overtime rule was last adjusted in 2004.

NAFOA’s comments have focused on how potential changes to overtime elgibiity would affect Indian Country employers. As it did with the Obama-era Rule, NAFOA emphasized that many tribal governments are located in rural communities and creating a one-size-fits all threshold for overtime eligibility across the country, regardless of cost-of-living, would not be viable for tribal employers.

Current Status and Action:

Many employees are drawn to work for tribal governments, despite being located in rural areas and having lower salaries, out of a desire to work for their communities and improve the lives of their people. NAFOA submitted extensive written comments to the Department o Labor and met face-to-face at the Charlotte conference.

For more information on how your tribe can prepare for the overtime rule, please see our broadcasts.