DOL Overtime Rule
The Partnership to Protect Workplace Opportunity (PPWO), which CDA joined to address concerns regarding the overtime rule, has provided an overview of the overtime regulations and what might be coming in 2017. Please be assured CDA will continue to monitor and report to our members any new developments related to this important issue.
Texas Court Blocks DOL Overtime Rule; DOL Files Appeal
In Nov. 2016, the U.S. District Court in Texas blocked the Department of Labor's (DOL) overtime rule from going into effect on Dec. 1. The emergency motion was granted at the request of 21 states and others, and was filed on the grounds that the DOL has overstepped its authority and put forward an onerous regulation that has to be stopped before the implementation date. CDA and others have argued that doubling that threshold and creating a "one-size-fits-all" without concern for regional differences for overtime eligibility across the country is just not workable for many employers and could do more harm than good for many affected employees as well.
Judge Amos Mazzant of the U.S. District Court for the Eastern District of Texas granted a nationwide preliminary injunction against implementation of the DOL overtime rule. The judge granted the injunction as it "preserves the status quo while the court determines the department's authority to make the final rule as well as the final rule's validity." In this injunction, the court ruled the regulation exceeded the authority granted to the DOL by Congress.
The DOL filed a motion for an expedited briefing of its appeal of a federal judge's decision to hold off on the federal overtime rule. The appeal was brought Dec. 1 by then-Labor Secretary Thomas Perez; Wage and Hour Administrator David Weil; Assistant Administrator Mary Zeigler and the DOL. A final court decision could take some time and for now the overtime rule seems to be on hold.
Pres. Trump nominated R. Alexander Acosta to be the 27th U.S. Secretary of Labor. He was sworn in on April 28, 2017, and it is expected that information regarding the overtime ruling with be forthcoming as the DOL reviews the issue under the current administration and new leadership.
Overview on the currently delayed/blocked overtime rule:
The DOL issued a rule in 2016 to change the exemptions for executive, administrative and professional employees - also known as the "white collar" exemptions. The new proposed rule would almost DOUBLE the salary level required to qualify for the white collar exemption - from $23,660 per year to $47,476 per year, which represents an increase of over 100%.
The DOL also proposes making an automatic increase in this minimum salary going forward on an annual basis with no ability by the public to comment or provide input. This proposed rule threatens businesses and their employees - and the economy as a whole.
CDA joined with other stakeholders in sending a message to Congress supporting legislation in the 114th Congress that would have phased in the DOL’s new salary threshold in four stages over five years, however, given the status of the rule this legislation has not been reintroduced in this 115th Congress.
U.S. employers have been in legal limbo when it comes to compensating employees under the Obama administration's revised Fair Labor Standards Act (FLSA) overtime rule. (Employers subject to the FLSA are required to pay nonexempt employees working more than 40 hours per week at a rate of time-and-a-half.) After the revised rule was issued last May, many employers either reclassified some exempt employees (those earning salaries below the new threshold) as nonexempt (paid hourly), or raised their pay to avoid reclassification. Given the current court involvement, the DOL is, for the most part, "not doing anything right now," as the department works with the new leadership to set a path forward on this issue.
CDA, along with our Partnership to Protect Workplace Opportunity (PPWO) coalition continue to work to promote efforts to make needed changes in the new overtime rule and to ensure any final rule is reasonable and workable.
For further information you may visit the DOL’s website on overtime .