Overtime Rule to Take Effect – December 1, 2016

A Department of Labor (DOL) final rule is set to increase the salary threshold for the “white collar overtime exemptions” to $47,476 per year. Recent challenges to the rule have left some questioning whether it will take effect on Dec. 1, 2016, as scheduled.

The U.S. House of Representatives passed H.R. 6094, which would delay implementation of the final rule. The bill would have to be passed by the Senate and approved by the president before it becomes law. President Obama has threatened to veto the bill.

A coalition of 21 states and a number of business groups have filed lawsuits challenging the rule.

On Nov. 16, 2016, a federal judge held a hearing and heard arguments for and against a petition to issue an injunction that would effectively halt implementation of the final rule. A decision regarding the injunction is expected by Nov. 22, 2016.

However, unless the bill is passed into law or a court orders an injunction, the DOL’s overtime rule will take effect on Dec. 1, 2016.

Employers should be prepared to comply with the DOL’s new overtime final rule by Dec. 1, 2016. Actions needed for compliance may include raising salaries of currently exempt employees or paying overtime to employees who will no longer be exempt. Specific actions will depend on a number of factors related to each employer’s workforce.

Parelius Insurance Services will continue to monitor these developments and provide updates as necessary.