By Nick Goldstein, vice president of regulatory affairs & assistant general counsel, ARTBA
A federal court Nov. 22 blocked the U.S. Department of Labor’s (DOL) new overtime pay regulations, which were to begin Dec. 1. The rules will remain on hold while court challenges continue.
Currently, salaried employees who earn more than $23,660 annually can be exempted from overtime pay if their primary responsibilities fall into categories such as managerial and administrative duties. The new rule would raise the minimum yearly salary to $47,476, before their specific duties can be examined for an exemption to overtime pay.
The regulation also includes a mechanism to automatically adjust the salary threshold every three years based on the 40th percentile of pay in the lowest wage U.S. Census Bureau region. If the rule is upheld, the first update will take place in January 2020. More than four million additional workers will qualify for overtime once the new regulation is fully implemented, according to DOL estimates.
There have been numerous issues raised with the rule, specifically by the non-profit sector. A major concern is that the new minimum salary level for overtime exemption does not reflect geographic differences in average salary levels. For example, the minimum salary in New York City is very likely to be much higher than it would be in Cheyenne, Wyoming.
The DOL rule is also likely to face an uncertain future in the new presidential administration. ARTBA will continue to monitor this situation as it develops.