Legal Alert Update: Attempted Delays for Increased Salary Requirement for Overtime Exemptions



The United States Department of Labor issued regulations increasing the salary requirement for employees who are exempt from the overtime rules of pay.  The new salary requirement of $913 per week will take effect on December 1, 2016.

In September 2016, the State of Nevada filed a lawsuit in a federal court in Texas to block the implementation of the new regulations.  Twenty other states, including Indiana, have joined the lawsuit.  Less publicity has been given to a similar lawsuit filed by the National Federation of Independent Business and the U.S. Chamber of Commerce, joined by almost 50 different business groups.

The lawsuits claim that the new salary threshold is excessively high and ignores regional and industry differences that were previously recognized by the DOL.  The lawsuits also argue allowing the salary standard to be increased every three years is an improper assumption of power by the agency.

In addition, the House of Representatives passed a bill that would delay the implementation of the new rule until June 1, 2017.  That bill is not expected to be passed by the Senate, or to overturn a threatened presidential veto.  The Senate introduced a bill that would phase-in the increases over a three-year period and exempt non-profit agencies.  Neither bill will see any further action in Congress until the November elections.

Whether the lawsuits or the proposed legislation will delay the implementation of the increased salary requirement remains to be seen.  Similar suits delayed the implementation of rules from OSHA on safety policies and drug testing.  At this time, the new salary levels will take effect on December 1.

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