Department of Labor Overtime Rule Update
On Tuesday, November 22, 2016, the U.S. District Court for the Eastern District of Texas granted the motion filed by 21 states to enjoin the U.S. Department of Labor from implementing and enforcing the new DOL Overtime Rule announced on May 18, 2016. The Overtime Rule takes effect on December 1, 2016. Per this rule, employees need to earn at least $913/week or $47,476/year in order to be considered an exempt employee, even if the employee’s duties qualify as executive, administrative or professional.
What does this mean for employers? Since the rule was announced in May, employers have spent countless hours reviewing job descriptions for all of their employees and re-classifying some exempt employees as non-exempt employees 1) if the job duties of these employees do not qualify as exempt duties; or 2) if the salary level for employees who qualify as exempt because of their duties does not meet the new salary threshold.
The Texas court’s decision does not impact any reclassifications that employers have made due to the nature of the duties performed by employees. Thus, for those employers who have reclassified jobs as non-exempt positions based upon the duties performed, those reclassifications are not impacted by the court’s decision and should remain in place.
For those employers who have reclassified otherwise exempt (based upon the duties performed) positions to non-exempt based upon the salary level for the positions, the Texas court’s decision seems to offer a reprieve, at least temporarily, from the requirement to re-classify these positions as non-exempt. It is very likely that the Texas court’s order will be appealed and we can anticipate further developments in this area very soon. For those employers who were reclassifying exempt employees based upon their salary level, as opposed to their duties, please contact us so that we can discuss how best to proceed at this time.
If you have any questions regarding the the ruling or status of the new rules, please contact Maureen A. Murphy at (312) 506-4475 or