Overtime Update

 

It seems a lifetime ago that the Department of Labor (DOL) announced changes to employee overtime rules that would raise the salary threshold for exempt employees.* The rule was to take effect on December 1, 2016. Many employees who had been exempt from overtime would be eligible for overtime pay under the new rule which raised the exemption threshold to $913 a week: $47,476 per year rather than the current $23,660. Employers scrambled to revise job descriptions and policies regarding overtime work to comply with the rule.

Twenty-one states file suit to challenge the new rule. On November 22, 2016, the U.S. District Court in Sherman, Texas granted the states’ motion to prevent the rule from taking effect. The DOL appealed the decision to the Fifth Circuit. Briefing was completed last month, and it appears that the DOL has abandoned the new salary level. Instead, the DOL is seeking information. On July 26, the Federal Register published a request for information posing 11 sets of specific questions for public comment. Questions include whether there should be multiple salary levels for exempt employees based on factors such as inflation, employer size, and census region; how setting different exemption levels for executive vs. administrative employees would affect businesses; and whether the exemption test ought to be based solely on the employee’s duties rather than salary. Comments are due by September 25, 2017. The questions and instructions for submitting comments are here. Anyone can submit a comment, and so far over 65,000 comments have been submitted.

What should employers do? Nothing for now. Now, we wait for the Fifth Circuit to issue an opinion.

See our previous blogs about the overtime rule: 11/29/16 – A Lump of Coal for Admin Employees? Texas Court Blocks Implementation of DOL’s Overtime Rule Change; 11/16/16 $47,476 the Magic Number – Are You Ready?; 10/10/16 – Time’s a Wastin’ – Get Ready for the new Overtime Rule; 5/27/16 – Holiday Gift for Salaried Workers: OVERTIME.

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