Update to the 2016 Final Overtime Rule

September 6, 2017
September 6, 2017 LI Advantage

Update to the 2016 Final Overtime Rule

Compliance has continued to monitor developments related to the 2016 Final Overtime Rule, originally scheduled to take effect December 1, 2016. This has included developments related to the temporary injunction issued last November just days before the rule would go in to effect, the DOL’s final brief in their appeal of the injunction indicating they did not want to pursue the salary increase as given in the Final Overtime Rule but did want to confirm their ability to use a salary test and, finally, the DOL’s release last month of a Request for Information signaling their intention to rewrite the overtime rules.

In this most recent development, Federal Court Judge Mazzant has struck down and invalidated the Final Overtime Rule that would have significantly expanded overtime eligibility with an increase to the annual salary threshold to qualify for exempt status under the Fair Labor Standards Act (FLSA) to $47,476, an increase to the annual threshold for the Highly Compensated Employee exemption, and the institution of a tri-annual increase of the salary thresholds.

In granting summary judgment to the more than 55 businesses who challenged the DOL’s 2016 rule, Judge Mazzant indicated that although the US DOL did have the ability to use a salary test to base eligibility for exemptions from the FLSA, the agency had used the test improperly in the 2016 Final Rule.

Employers should continue to comply with current DOL regulations which include a weekly salary threshold of $455 for the executive, administrative, and professional white-collar exemptions from the minimum wage and overtime provisions of the Fair Labor Standards Act. Employers are also cautioned to review applicable state requirements related to exemptions from overtime.

We will continue to monitor and communicate any further developments.

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