Good News On The DOL's Overtime Rules - We Go Back To The Drawing Board!

Volume 16, Issue 17
August 29, 2017

The overtime rule published in 2016 by the Department of Labor ("DOL") that significantly increased the minimum salary necessary to qualify for the white-collar and highly compensated overtime exemptions will be changed under the DOL's new leadership.

To recap, the revised overtime rule was announced in May 2016 with an effective date of December 1, 2016. It applied to employees who met the duties tests of the "white-collar" overtime exemption for executive, administrative, professional, outside sales, and computer employees and of the "highly compensated" overtime exemption. Under the new rule, the minimum salary necessary to qualify a white-collar employee for an overtime exemption was increased from $455 per week ($23,660 per year) to $913 per week ($47,476 per year), and the minimum salary for a highly compensated employee was increased from $100,000 to $134,004 per year.

In late November 2016, a federal judge issued a nationwide injunction temporarily enjoining the DOL from implementing the new overtime rule. This decision is now on appeal before the U.S. Circuit Court for the Fifth Circuit. Under new leadership after President Trump's appointment of Alexander Acosta, the DOL has changed its position in this case and has publicly declared its intention to "undertake further rulemaking to determine what the salary level should be." Accordingly, in July the DOL published a "Request for Information," seeking public input on the overtime rule. The DOL is particularly focused on the salary threshold and has asked numerous detailed questions, such as
"[w]ould a test for exemption that relies solely on the duties performed by the employee without regard to the amount of salary paid by the employer be preferable to the current standard test," and  "[s]hould the regulations contain multiple standard salary levels"?

The public comment period is open until September 25, 2017, after which time the DOL is expected to propose a revised overtime rule. We encourage employers to view the DOL questions and consider whether providing input is appropriate. We are available to assist you with the process if you decide to provide public comment.

Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.