Employers Get Break For Now

November 19, 2015

In a surprise announcement, the Solicitor of Labor, Patricia Smith, has indicated the final rule on overtime eligibility being considered by the Department of Labor will likely not be declared final and implemented until late 2016.  During a panel discussion at the American Bar Association’s Labor and Employment Law Conference, Solicitor Smith indicated there were a huge number of comments about the proposed rule that would raise the salary limit for those who are eligible to be exempt from overtime pay from $23,660 per year to $50,400 per year.  The Solicitor of Labor indicated the rule likely will not be implemented until very late in 2016 after the Department has had a chance to digest all of the comments and make final corrections to the proposed rule.

Many are surprised this proposed rule would not be implemented until after the election.  It is possible this delay is because of the unpopularity of the rule and the desire by the Department of Labor to determine whether such a rule will actually be enforced or if political opposition will cause further delay in the imposition and enforcement of the rule.  For now, employers can breathe easier but should not ignore the potential impact of this rule change.  There is still a strong potential many employees who are currently exempt from overtime pay will become nonexempt and eligible for overtime pay because their salary does not place them in the exempt category.

Ruder Ware will continue to monitor this and keep you advised about any changes in the implementation timeline. 

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