Obama-Era Federal Overtime Rule Change No Longer in Limbo

The Fair Labor Standards Act (FLSA) states that employees must be paid time-and-a-half once they work more than 40 hours in a week. However, businesses may exempt workers from the requirement if their duties are “managerial” in nature and they reach a certain salary threshold. This is also referred to as “white collar” exemptions.

The Obama Administration proposed changes to the federal overtime rule that would have nearly doubled the minimum annual salary threshold required to qualify for the FLSA exemptions – from $23,660 to $47, 476.  This change was scheduled to take place on January 1, 2016, however, legal challenges effectively stalled implementation, while not actually changing the rule. This left many employers in the dark on their current status. The rule remained in limbo until August 31, 2017, when the Justice Department announced it would not appeal a District Court’s ruling that said the Obama Administration overreached when it expanded the number of people covered by the rule.

However, the overtime regulation pay debate is far from over. On July 26th, 2017, the U.S. Department of Labor posted a Formal Request for Information regarding current wage standards  FLSA “white collar” exemptions. This sets the stage for the Trump Administration to revisit the issue.