Congress has joined the fight in trying to stop or delay the Department of Labor’s new overtime regulations. This week, the U.S. House of Representatives voted 246 to 177 to delay the effective date of the DOL’s overtime rule by six months until June 1, 2017. This bill faces an uphill battle — first having to pass the Senate and then a very likely Presidential veto.
Given that the bill is unlikely to become law, and given the questionable future of pending court challenges, employers should continue to prepare for the new regulations to be effective on December 1st. We will continue to monitor these challenges and keep you apprised.
This week, 21 states and over 50 business groups filed suit in the Eastern District of Texas challenging the Department of Labor’s new overtime regulations, arguing that the DOL overstepped its authority in establishing the new minimum salary level and the automatic increases to the minimum salary every 3 years.
The new regulations (which,as we have previously discussed
, more than double the minimum salary requirement for employees to be eligible for the administrative, professional and executive overtime exemptions) have been hotly contested — in Congress and now in the courts. But it is far from clear that any of the efforts to delay or stop the new standards will be effective.
We will continue to monitor these challenges and keep you apprised. However, unless and until a challenge is successful, employers should plan to be ready for the new regulations on December 1st.
This morning the Department of Labor announced that it is seeking to increase the number of employees eligible for overtime pay by increasing the minimum salary required if an employee is to be considered exempt under the administrative, executive and professional exemptions. The proposed increase would take the minimum annualized salary from $23,660 to $50,440. In addition, under the proposed rule the threshold for the FLSA’s Highly Compensated Employee exemption would rise from $100,000 to $122,148. Both the minimum salary and the Highly Compensated Employee threshold would be indexed for inflation. The DOL also suggested that it may seek other changes to limit the available overtime exemptions. If this change becomes a final rule, we would expect it to become effective in 2016.
Note that even if employees meet the higher minimum salary requirement, they still must meet the other requirements for exempt status — being paid on a salary basis and satisfying one of the duties tests — to qualify as exempt from overtime requirements.
No action is necessary at the moment as the proposed rule is not final. We will keep you updated on future developments.