What Employers Need to Know About the Overtime DOL Appeal
The Department of Labor (DOL) is challenging a federal judge’s decision that invalidated its attempt to increase the salary threshold for the “white collar” overtime exemption under the Fair Labor Standards Act (FLSA). The DOL has appealed the ruling to the Fifth Circuit Court of Appeals, adding another layer of uncertainty for employers.
Why It Matters
This legal battle stems from a lawsuit filed by the National Association of Wholesaler-Distributors (NAW) and other trade groups, which argued the DOL overstepped its authority and violated the Administrative Procedure Act. For now, the overtime salary thresholds revert to $35,568 annually for most exempt employees and $107,432 for highly compensated employees. However, employers operating in states with higher salary thresholds—like California, New York, and Washington—must still comply with state laws.
What’s Next
- Potential Fast-Tracking: NAW is closely monitoring whether the DOL will attempt to expedite the appeal. If it does, NAW plans to oppose this effort, citing the need for thoughtful deliberation.
- Impact of New Leadership: A change in administration could shift the strategy. The new DOL leadership may choose to withdraw the appeal altogether, leaving the ruling intact.
What Employers Should Do
- Stay Informed: Monitor federal and state regulations to ensure compliance.
- Review Pay Structures: Evaluate whether current salaries align with both federal and applicable state overtime thresholds.
- Plan for Change: Be prepared for potential adjustments if the DOL’s appeal leads to a new ruling.
As the case unfolds, this decision has significant implications for labor costs, compliance strategies, and broader regulatory trends. Keep an eye on this evolving issue to stay ahead of the curve.
