On August 31, a Texas Federal judge invalidated the expansion of the federal overtime rule. As the rule was originally written, the salary threshold for employees to qualify as exempt from overtime pay requirements was increased from $23,660 per year to $47,476 per year. District Court Judge Amos L. Mazzant found that DOL does not have the authority to use a salary-level test that would effectively eliminate the duties test. He also noted that the mechanism that would automatically adjust the threshold was unlawful.
This rule was originally scheduled to take effect on December 1, 2016. A preliminary injunction was issued on November 22, 2016. In other words, this rule was never actually in force. This ruling addresses part 541 of the regulations defining executive, administrative and professional employees, so if you have employees meeting this exception to the overtime rule, the salary threshold will remain at $23,600 per year.
There is a Request for Information out currently from the DOL to determine if there is a more appropriate salary threshold for this exemption. It is possible that the DOL will change the threshold at some point in the future, but we will communicate any proposed changes in the threshold. For now, if you have employees making over $23,660 per year that do meet the definition of executive, administrative, or professional employee under part 541 of the rule, then they are eligible for the overtime exemption.
