DOL's Federal Overtime Rule Blocked

The Department of Labor’s (DOL) new overtime rule was set to take effect on December 1, 2016. Employers were given more than six months to prepare for the rule that would have increased the salary threshold for the “white collar overtime exemptions” to $47,476 a year. Instead, on November 22, 2016 a federal judge issued a preliminary injunction, blocking the new rule until further notice.

What the Overtime Rule would have provided:

  • A salary threshold increasing eligibility from $455/week to $913/week
  • An automatic update of the salary threshold every 3 years, based on wage growth over time
  • Strengthened overtime protections for salaried workers already entitled to overtime
  • More clarity for workers and employers

How employers needed to adjust for the change:

  • Pay time and a half for overtime work
  • Raise workers’ salaries above the new threshold
  • Limit workers’ hours to 40/week

Next steps after the block?

The initial proposal came from President Obama in 2014 to update the overtime regulations to reflect and modernize the rules for the Fair Labor Standards Act (FLSA). It is yet to be seen what actions President elect Trump will take to change or block the overtime rule.

Employers can rely on the existing overtime exemption rules until a decision is reached, but should remain watchful for new developments related to the rule. We will continue to monitor these developments and provide information and updates.

Categories: Employee Benefits

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