DOL Announces Final Overtime Rule, EEOC Scraps Component 2 Pay Data, Second Circuit Rules on Forced Arbitration

In September, The Department of Labor announced its final overtime rule, making 1.3 million American workers eligible for overtime pay under the Fair Labor Standards Act. The final rule updates the earnings threshold necessary to exempt executive, administrative, or professional employees from the FLSA’s minimum wage and overtime pay requirements, and allows employers to count a portion of certain bonuses or commissions towards meeting the salary level. The new threshold is $684 per week, up from the present level of $455 per week. The rule also raises the total annual compensation level for highly compensated employees from $100,000 per year to $107,432 per year. Third, the rule allows employers to use nondiscretionary bonuses and incentive payments, including commissions paid at least annually, to satisfy up to 10% of the standard salary level. The changes are scheduled to go into effect on January 1, 2020.

The Equal Employment Opportunity Commission (EEOC) has stated that it does not plan on renewing the collection of EEO-1 “Component 2” pay data after the current collection round. The Commission plans to evaluate the utility of the data as well as the financial cost of compliance for employers. According to the EEOC’s statement, the costs for employers to submit both Component 1 and Component 2 data would be approximately $620 million each year as compared to the approximately $54 million the EEOC originally estimated.

The Second Circuit recently ruled in a case involving Citi Group that a financial adviser who had sued the company under theories of discrimination, as well as other causes of action, was compelled to arbitrate her dispute as opposed to submitting it to judicial litigation. This is in keeping with the Supreme Court’s decision earlier this year in Epic Systems Corp. v. Lewis, in which the Court condoned and encouraged the use of arbitration under the Federal Arbitration Act to resolve disputes through arbitration rather than judicial litigation.

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