Since the Department of Labor, DOL, announced the Overtime Final Rule on May 18 of this year, it’s faced an uphill political and legal battle.
If you’re a business owner, you’re probably familiar with the key parts of this law, but here’s a refresher.
The Overtime Final Rule will raise the salary threshold from its current value of $23,660 (which was enacted in 2004) to $47,476. If a worker is being paid below this threshold, they will qualify for overtime pay. Over 4 million Americans will be eligible for this. The DOL broke down this number by state. Another catch to the new law is that it’ll automatically update this salary threshold every three years. You can watch a video summary here.
But the battle began when 21 states joined together on September 19 to file a lawsuit against this new regulation in the United States District Court for the Eastern District of Texas. They’re arguing that it violates the Tenth Amendment because it’ll allow the federal government to decide how state-level employees are paid. They also believe that it will “unfairly and substantially increase their employment costs.”
One the same day, business groups like the U.S. Chamber of Commerce, National Federation of Independent Business, National Retail Federation also filed a suit to challenge this law. Then it got messier. On September 28 the House passed a bill mostly on party lines to delay the rule becoming effective at the start of December. President Obama backfired with threatening to veto the bill, according to The Hill.
Now what does all of this push-and-pull mean for you and your business? Will the FLSA Overtime Rule go into effect on December 1 or be delayed?
Experts believe that even with the lawsuits and Congressional drama, the regulation will start as scheduled. So the answer is YES, get ready to be compliant. Without a doubt, the idiom “better safe than sorry” applies to this situation.
If your company doesn’t know where to start, we can help. We offer two exemption tests: the FLSA Exemption Duty Test and Salary Test. After we review the test results of your company, we deliver a report detailing the steps you have to take to follow the regulation.
The summer flew by and now we’re less than 90 days away from December 1. Schedule a free consultation today by clicking on the button below.