Overtime Rule Blocked in Federal Court: Will Not Take Effect Dec. 1

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In a surprise ruling, a Federal judge in Texas issued a nationwide injunction on the Department of Labor’s overtime rules set to go in effect on December 1. These rules, released in May, would have nearly double the threshold at which executive, administrative and professional employees are exempt from overtime to $47,476 from $23,660. The court agreed with 21 states who filed to challenge the overtime rule. While many hotels and restaurants have changed their business model to comply with the December deadline, at this time the threshold will remain at $23,660.

While this is a positive step forward, the decision does not delay the overtime rule indefinitely. Additional legal actions could result in the overtime rule taking effect. The National Restaurant Association will be releasing an updated legal compliance handbook for members next week.

National Restaurant Association Webinar

You may be wondering what to do about the new federal overtime rule after a federal judge granted an injunction delaying implementation of the changes.

Though the rule is on temporary hold, the National Restaurant Association wants its members to be fully prepared if the decision is overturned and a new compliance date is set. Join Angelo Amador, the NRA’s senior vice president and regulatory counsel, and Shannon Meade, director of labor and workforce policy, for a webinar Dec. 1, at 2 p.m. EST. They’ll address what happens next, how a new Congress and Administration could change things, and what employer options and considerations are available to you.

Register now.

WHAT’S IN THE RULE

The DOL regulation that was set to take effect Dec. 1, 2016, outlined the following changes to existing federal overtime rules:

  • Guarantee time-and-half pay to any salaried employee earning under $47,476 a year ($913 a week) and who works more than 40 hours in a week. That’s double the current salary threshold of $23,660 ($455 a week).
  • Starting Jan. 1, 2020, automatically update the salary threshold every three years, tying it to the 40th percentile of full-time salaried workers in the lowest-income Census region (currently the South). Based on current wage trends, the DOL projects a salary threshold of more than $51,000 by Jan. 1, 2020.
  • Make no changes in the duties tests used to determine whether a salaried employee above the threshold is considered an executive, administrative or professional employee – thus exempt from overtime pay.
  • For the first time, allow certain bonuses and incentive payments to count toward up to 10 percent of the new salary level.

COMPLIANCE MATERIALS

  • Department of Labor compliance information. Fact sheets, Q&A, final regulation, and more.
  • Webinar recording and Powerpoint (Nov 10, 2016): The NRA’s Shannon Meade, director of labor and workforce policy, joined Alex Passantino, partner at Seyfarth Shaw, to provide an overview of the final regulations.
  • Webinar recording and PowerPoint (May 26, 2016): The NRA’s Angelo Amador, senior vice president and regulatory counsel, joined Alex Passantino, partner at Seyfarth Shaw, for an overview of the  regulations.
  • Workshop presentation on the new overtime rules. Illinois Restaurant Association (June 21, 2016).
  • Insights: In-depth discussion of the new rule, Littler Mendelson. (May 31, 2016)
  • More NRA Resources