On October 30, 2017, the Department of Labor (DOL) issued a news release announcing its intention to engage in new rulemaking regarding overtime. As many employers followed closely, the DOL previously increased the salary threshold for exempt employees to $47,476, which was set to take effect December 2016. Those regulations were halted by a federal judge in Texas in November 2016 and eventually struck down in August 2017. The DOL, however, has appealed that decision and plans to ask for the proceedings to be stalled to give it time to come up with new rules.
DOL Secretary Acosta has stated that he thinks the current threshold of approximately $24,000 (set in 2004) needs to be updated, but almost doubling it to $47,000 will be a “shock to the system.” The DOJ’s litigation strategy allows it to avoid other challenges to its rulemaking authority while still being able to dismiss the case as moot once the new rule is in place. Given Secretary Acosta’s signals, it appears that an increase to the salary threshold is inevitable, so employers should be mindful of adjusting their exempt employees at or near the old threshold if they wish to maintain those employees’ exempt status.