Ashlyn Lindskog

U.S. employers have been in legal limbo when it comes to compensating employees under the Obama administration’s Fair Labor Standards Act (FLSA) updated overtime rule. The revised rule issued last May was blocked by a federal judge in November of last year via a temporary injunction, effective nationwide, that temporarily prevented the rule from taking effect on December 1, 2016. Since then, the rule’s implementation and enforcement have been on hold.

There was speculation that, after the new presidential administration took over, the Department of Labor would withdraw its appeal of the injunction, allowing it to remain in place. However, during a confirmation hearing this spring, new Labor Secretary Alexander Acosta stated that the salary threshold for overtime exemption should be raised from $23,550 to “somewhere around $33,000” after figuring for inflation since 2004 – the last time the regulation was successfully adjusted.

The DOL filed its brief at the end of June in the pending case. In it, the Department declined to advocate for the specific salary level ($913 per week) set in the final rule, allowing the injunction to stand. So, it appears that the proposed $47,476 salary threshold from the updated overtime rule will not be implemented. DOL has started the process internally to formally consider new rulemaking to determine what the salary level should be, including a public comment period. In the meantime, the Department is still pursuing a portion of the appeal asking the appeals court only to address the legal question of whether the Department has statutory authority to set a salary level test.

If you have any questions about how this development may affect you and your business, please give one of our Employment attorneys a call.