The U.S. Department of Labor (DOL) has decided not to defend the increased salary threshold for overtime pay eligibility from $23,660 annually up to $47,476 annually under the Obama-era Fair Labor Standards Act (FLSA) revised overtime rule. Even so, the DOL does intend to vigorously advocate for its statutory authority to promulgate such a rule.
The rule, which was originally set to have an effective date of December 1, 2016, was delayed by a court injunction issued on November 22, 2016. The injunction was further extended to July 1, 2017 to give the Trump administration time to review the revised rule.
The DOL is expected to revisit the overtime threshold in new rulemaking and has submitted a Request for Information (RFI) to the Office of management and Budget (OMB) this week, which we can expect to be published soon.
Although the DOL will not pursue defending the $47,476 salary threshold, employers should not rush to make any additional changes if they have already made adjustments to be compliant with the rule until the court makes a final ruling.
Paylocity will continue to monitor the status of the overtime rule injunction, new DOL rulemaking, and related legal actions and will provide updates as more details become available.
Thank you for choosing Paylocity as your payroll tax partner. Should you have any questions, please contact your Paylocity Account Manager.
This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a payroll service provider are encouraged to seek the advice of a qualified CPA, tax attorney, or advisor.