In 2016 the Department of Labor finalized a regulation that would have updated the Fair Labor Standards Act’s overtime standard by raising the salary threshold under which an employee would be entitled to overtime to $47,476 from the current level of $23,660.
The regulation was supposed to go into effect on Dec. 1, 2016. However, prior to the effective date, a U.S. District Judge issued a nationwide preliminary injunction to prevent the DOL from implementing or enforcing the changes to the overtime regulation until the court issued a final ruling on the case. A final ruling has since been issued by the court holding that the DOL overstepped its authority with the proposed regulation. Of course, many businesses had already complied with the proposed regulation and were left without guidance as to how to proceed.
The DOL is now attempting to provide that guidance. In July of this year, the DOL formally abandoned its proposed regulation and instead published a Request for Information (RFI). This RFI allows the DOL to ask the public to comment on a number of questions that would help the DOL revise the regulation. In the RFI, the DOL acknowledges that many stakeholders felt the standard salary level of $46,476 was too high. So, it appears that while the DOL is committed to proposing a new regulation, the salary threshold figures will be lower than that proposed in 2016. In the meantime, the current overtime salary threshold will remain at $23,660 for the foreseeable future.
What does this all mean for you, as a business owner? It means that while the DOL is committed to proposing a new regulation, the salary threshold figures will be lower than that proposed in 2016 or perhaps even removed altogether. In the meantime, the current overtime salary threshold will remain at $23,660.