December 02, 2016
Although the Department of Labor's overtime expansion rule is on hold following last week's federal district court injunction, a survey of our Employment Rights Committee suggests most companies likely have already moved forward with the changes. This week, the Justice Department announced it would appeal the decision awarding the preliminary injunction. The decision indicated DOL lacked the authority to order such a significant increase in the minimum salary for the so-called white collar exemptions, which would have increased from $24,660 annually to $47,476. Yet, the decision was handed down only one week before the rule was to take effect on December 1. Thus, many companies had already set changes in motion—either converting employees to non-exempt status or increasing exempt employees’ salaries. Of the 44 companies who responded to our survey, 39 had already either implemented changes or communicated planned changes to affected employees. Of the 17 companies in the latter group, roughly half were still moving forward with the changes. Meanwhile, few observers expect the Trump administration to continue to defend the rule in the courts after January 20. However, the option of seeking a smaller increase in the minimum salary level, possibly as a larger package of regulatory or legislative changes, would remain.