As we noted in our May 18 alert, the United States Department of Labor issued a final rule (the "Rule"), effective December 1, that will increase the minimum annual salary threshold from $23,600 to $47,476 to qualify positions as exempt from the federal Fair Labor Standards Act's overtime requirement. To qualify for the overtime exemption, employees must also meet certain minimum requirements related to their primary job duties.
You may have heard about the significant opposition to the Rule, including a federal lawsuit filed by 21 states and another by more than 50 business groups, plus proposed federal legislation aimed at preventing or delaying implementation of the Rule. Yet, despite these efforts, employers should not plan for a delay to the December 1 effective date.
Officials in the Obama administration have indicated that President Obama will veto any attempt to legislate a delay in the effective date of the Rule, making the U.S. House of Representatives' recent passage of a bill to do just that dead on arrival. And while it is possible that a federal court could act to delay or stop implementation of the Rule, unless and until this occurs, employers must be prepared for the Rule to go into effect on December 1.
If they haven't already, employers should take immediate steps to review and adjust their compensation practices. Lowenstein Sandler LLP's employment law attorneys are experienced and knowledgeable about wage and hour compliance and would be pleased to provide legal counsel if you have questions.
