Update from the Editors: The new overtime rules that were set to take effect on December 1 have been put on hold after a nationwide injunction was handed down on November 22 by a federal judge in Texas. Read more about the injunction here.
In a final regulation published in May of 2016, the US Department of Labor’s Wage and Hour Division announced major changes to the overtime standards for salaried employees. In the past, a salaried employee earning less than $23,660 annually had to be paid overtime for time worked over 40 hours in a week, regardless of the employee’s duties. The final regulation doubles that minimum threshold to $47,476 beginning on December 1, 2016. Further, the final regulation automatically adjusts the threshold every three years based on the 40th percentile of weekly earnings for full-time salaried workers.
The new rules have been challenged by both litigation and legislation:
A group of over 50 private organizations has filed a legal challenge to the new overtime regulations that will increase the salary threshold for exempt employees from $23,660 to $47,476 effective December 1, 2016, thereby entitling millions of workers to overtime pay who currently are exempt. In other litigation, a group of 21 states has sued to block the new rules.
In addition, bills have been introduced in Congress that would delay implementation of the new salary threshold. These include:
- The Overtime Reform and Enhancement Act (H.R.5813) would slow the implementation of the overtime rule. Under the bill, the full amount of the proposed increase would only take effect after December 1, 2019, with gradual increases to the threshold implemented annually. H.R.5813 would require the Department of Labor to initiate a new notice and comment rule making for any future changes to the overtime threshold.