Update to the Department of Labor’s Overtime Rule

The new Overtime Rule, which was to be in effect beginning December 1 , 2016, has been blocked. On November 22, 2016, a judge for the United States District Court of the Eastern District of Texas enjoined the Obama Administration from implementing the proposed regulations

The new regulations would require that overtime be paid to all exempt employees who receive less than $47,476 and who work for businesses that earn $500,000 or more in gross sales or revenue. Wisconsin, along with 20 other states, filed a lawsuit to block the implementation of the new regulations due to concerns and lack of time to properly prepare.

This does not mean that the new rules have been overturned. Rather, it means that implementation will, at least, be delayed.  It is also entirely likely that the federal government will appeal the injunction.  Even if the injunction stands, the regulations may yet go into effect at some point in the future.

Currently, there is no need for employers to make any changes effective December 1, 2016, regarding pay practices.  Employers that have already made changes should call legal counsel and tax representatives to determine whether any additional changes are prudent.  Those that have not yet made changes to salary structure for exempt employees should stay tuned for more information.