Status of Final Overtime Rule in Limbo
In May 2016, President Obama directed the U.S. Department of Labor to update overtime pay regulations with the publication of The Final Rule, https://www.dol.gov/whd/overtime/final2016/, affecting many U.S. employers and employees. The Final Rule was to take effect on December 1, 2016.
Federal law requires that employers pay overtime wages to all employees unless the employee is considered “exempt” from overtime regulations. The Final Rule increased the minimum annual salary for exempt employees to $47,476. Under the new rule, many employers would be required to either increase the salaries of these employees or change their classification to “non-exempt”, thus making them subject to overtime pay. Many employers therefore took the opportunity to reevaluate the exemption classification of their employees.
Shortly before the Final Rule was to take effect, a federal court temporarily blocked the rule pending further order by the court. https://www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/what-to-do-now-that-federal-overtime-rule-is-blocked.aspx.
The Department of Labor has appealed the hold, but it is very likely that nothing will be resolved before January 20, 2017 when the new President takes office. https://www.shrm.org/hr-today/news/hr-news/Pages/dol-files-appeal-in-overtime-rule-injunction.aspx?utm_source=SHRM%20Friday%20-%20PublishThis_HRDaily_7.18.16%20(25)&utm_medium=email&utm_content=December%2002,%202016&SPMID=&SPJD=&SPED=&SPSEG=&spMailingID=27227953&spUserID=ODY2OTYwNjY1NzIS1&spJobID=940389595&spReportId=OTQwMzg5NTk1S0
Martensen Wright will keep abreast of developments with the Final Rule as it affects many of our clients. Please check back here for the latest on the new overtime regulations.