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Overtime Rule Overturned

The Department of Labor overtime rule which was put on hold right before it was to be implemented last December has now been overturned.

The final overtime rule would have increased the salary level to qualify for exemption from paying overtime from $23,660 to $47,476 annually.

Federal District Court Judge Amos Mazzant, who issued the injunction to stop the implementation has now struck down the rule. The August 31 memorandum opinion and order states, ”The Department has exceeded its authority and gone too far with the Final Rule. Nothing in Section 213(a)(1) allows the Department to make salary rather than an employee’s duties determinative of whether a ‘bona fide executive, administrative, or professional capacity’ employee should be exempt from overtime pay. “

While this is a final ruling, the Department of Labor is still reviewing this issue. The Secretary of Labor has sent a request for information to the Office of Information and Regulatory Affairs, which normally indicates a need for information to determine new rules. During his confirmation hearing, Secretary Acosta noted that the increase to $47,476 was excessive and that he was open to a more modest increase – “somewhere around $33,000.” The salary level has not been adjusted for over 10 years.

So while the exempt salary minimum remains unchanged, we can expect more activity on this issue which may still mean an increase in the salary minimum, but not to the level we saw last year.

KMA will keep you posted on updates to this issue.

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Have wage and hour questions? Contact KMA today.

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