In May of last year the Department of Labor (DOL) announced that it would increase the threshold salary requirements in determining whether an employee is exempt from receiving overtime pay under the Fair Labor Standards Act (FLSA). The DOL’s final rule affected professional, administrative and executive employees by dramatically increasing the threshold salary from $455per week to $913 per week. It also bumped the salary threshold for exempt highly compensated individuals from $100,000 to $122,148.
This change in overtime regulations caused alarm to employers as they would have to pay overtime to millions of employees who were previously classified as exempt. Over 55 businesses and more than 21 states challenged this ruling on several grounds in November of 2016, just days before it was set to go into effect. The two groups argued the increase was too drastic and would wrongly reclassify employees performing bona fide executive, administrative and/or professional work that should be exempt from receiving overtime pay. An injunction was granted to the groups and they continued by filing a motion to have the ruling thrown out deeming it unlawful. On August 31, 2017 the district court granted their motion, agreeing that the dramatic increase would eliminate the ability to properly identify if a worker should be exempt based on their job duties.
Even though the initial ruling was deemed unlawful, the issue of whether there is legitimacy to any increase of the current salary threshold was not determined. Perhaps a less drastic increase to help screen out the obviously non-exempt employees will be pursued by the DOL going forward but in the meantime, the prior ruling will not be going into effect.
Even though the legal landscape of employment law is constantly changing, Fitapelli & Schaffer, LLP is always at the forefront processing what any changes would mean to everyday workers. If you have any questions in regards to being properly classified as exempt from receiving overtime if you are paid a salary, call Fitapelli & Schaffer, LLP for a free consultation. We can be reached at (212) 300–0375 or visit our website fslawfirm.com for more information.