Category: Overtime

BREAKING: Federal Judge Blocks New Overtime Rule

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I have previously blogged about the new Department of Labor (DOL) Overtime Rule that is set to go into effect on December 1, 2016. Put simply, the rule will require many employees paid a salary of less than $47,476 to be paid overtime at a rate of time-and-one-half for all hours worked over 40 in a given week. Currently, many employees who are paid a salary of at least $23,660, and meet other job duty requirements, are exempt from overtime pay.

On Tuesday, Judge Amos L. Mazzant III, a United States District Court Judge for the Eastern District of Texas, issued a preliminary injunction preventing the DOL’s rule from going into effect. The Judge partly found the rule cannot take effect because the increased salary basis amount of $47,476 was too high. The Court found the DOL must base the overtime exemption requirements on numerous factors, such as meeting certain job duties (see here). However, by increasing the salary basis minimum to the amount that it did, the DOL changed the overtime exemption test to a “de facto salary-only test.” Keep in mind, Judge Mazzant only granted a preliminary injunction, which may change when it comes time for the Court to make a final determination on all the evidence produced during discovery and trial.

As of this second, the overtime rule will not go into effect December 1, 2016, and the current overtime exemption tests remain in place. This includes the $23,660 salary basis requirement for certain types of employees. The Department of Labor is almost certain to appeal the Court’s order. This firm will keep everyone up-to-date on any appeals, decisions, or legislation affecting the ability for workers to earn overtime compensation at their jobs.

Developments in New Overtime Rule

Posted by Quinton Osborne on

As I previously discussed, the Department of Labor created a new overtime rule that will increase the salary threshold for so-called “white-collar” employees to be exempt from overtime.  Currently white-collar employees are exempt from overtime if they are paid a salary of $23,660 and meet other job duties qualifications.  However, the Department of Labor is increasing that threshold to $47,476.  This means white-collar employees earning less than this amount will be entitled to time-and-a-half for all overtime worked.  The new rule is set to take effect on December 1, 2016.

114th_United_States_Congress

Opponents of the new rule, largely Republicans, have already fought hard to prevent the rule from becoming implemented.  Senate Republicans initially contemplated blocking the rule by including a rider on this year’s Appropriations bill.  Such a rider would cut off funding necessary to implement the rule.  However, Republicans did not end up including the rider in the bill, knowing such a rider would likely result in a veto from President Obama.

Senators have also introduced a resolution (S.J. Res. 34) to block the overtime rule.  The resolution was only backed by Republicans.  The President is required to sign any resolution preventing the rule (per INS v. Chahda, 462 U.S. 919 (1983)), meaning Congress would need a two-thirds vote to override any veto.  As President Obama proposed and announced the overtime rule, a veto would be inevitable, and Republicans would be unable to override it.

However, legislators on both sides of the aisle have proposed changes to the new Overtime Rule.  This month, Representative Kurt Schrader (D-OR) introduced H.R. 5813.  The law would phase in the Department’s overtime rule over a period of three years.  It would increase the threshold as follows:

  • December 1, 2016: $35,984
  • December 1, 2017: $39,814
  • December 1, 2018: $43,645
  • December 1, 2019: $47,476

GovTrack currently gives the bill a 1% chance of becoming a law.  However, we will closely follow this and other related proposed legislation as it will determine whether a large amount of workers are entitled to overtime pay.

Illinois on the Verge of Getting Domestic Workers Bill of Rights

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On June 26, 2016, the Illinois General Assembly approved the Illinois Domestic Workers Bill of Rights.  In short, the law would provide greater workplace protections for domestic workers, such as caregivers and house cleaners, that were previously unavailable.  The bill is sitting on Governor Bruce Rauner’s desk for his signature.

CleanerWhat’s the Problem?

Domestic workers are not protected by many federal and state employment laws.  Many laws protecting workers only apply to companies with a minimum number of employees.  For example, Title VII of the Civil Rights Act of 1964 applies to employers with 15 or more employees, the Family and Medical Leave Act only to employers with 50 or more employees, and the Age Discrimination in Employment Act applies to employers with 20 or more employees.  As most companies employing domestic workers only have a few employees, these laws do not effectively protect them.

Moreover, some laws specifically exclude domestic workers from the employment protections.  For example, the National Labor Relations Act, which allows employees to form a union and negotiate for better pay, does not protect individuals “in the domestic service of any family or person at home.” 29 U.S.C. § 152(3).  Similarly, the Occupational Safety and Health Act, which sets minimum standards of health and safety at the workplace, does not cover domestic workers. 29 C.F.R. § 1975.6.

Domestic Workers Bill of Rights

The proposed legislation adds several employment protections for domestic workers.  The bill generally applies to people performing “domestic work,” which includes housekeeping, nanny services, caregiving, and companion services, among other duties.   The bill provides the following protections for domestic employees:

  • The bill allows domestic workers to be protected by Illinois’ Human Rights Act, which prohibits discrimination in Illinois with respect to employment on the basis of race, color religion, sex, national origin, ancestry, military status, age, marital status, sexual orientation, and disability.
  • The bill adds domestic workers as individual covered by the Illinois Minimum Wage Law, which mandates Illinois employers to pay their employers the minimum wage (currently $8.25) and overtime for all hours worked over forty in a given week.
  • Domestic workers must be allowed to have a 24-hour consecutive rest break in every calendar week. The domestic worker can voluntarily agree to work on such day of rest, but the employer is required to pay all hours worked on the rest day the overtime rate, even if the employee has not worked at least forty hours in the given week.

The Governor has 60 days to take action on the legislation.  If he approves the bill, it will become effective on January 1, 2017.  Domestic workers are often overworked and underpaid, and it is good to see these long-overdue employment protections close to becoming Illinois law.

New Federal Overtime Rule

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We are proud to announce the opening of Osborne Employment Law!  The firm’s founding attorney, Quinton Osborne, represents employees in all types of employment-related disputes, including unpaid wages, wrongful termination, discrimination, retaliation, non-compete disputes, sexual harassment, unemployment, and healthcare license defense.  Click here to learn more about the firm.

This portion of the website will be dedicated to providing updates about the firm, discussing recent employment-law cases, and reviewing relevant laws and regulations.  If you have any questions or requests for blog posts, contact Osborne Employment Law.

Recent Updates in Federal Overtime Law

Earlier this year, the United States Department of Labor announced likely the most important employment-related administrative rule for 2016.  The Department of Labor is the United States agency responsible for enforcing and setting standards for many work-related areas, including wage and hour standards.  Keep in mind, Congress is notoriously bad at passing laws.  Thus, often the major employment-related “legislation” on the federal level are actually regulations created by federal agencies.  In the employment world, this usually involves the Department of Labor or the Equal Employment Opportunity Commission, both of which have the authority to create regulations related to their defined areas.

Obama Signing Overtime Regulation

On May 18, 2016, President Obama announced publication of the Department of Labor’s new long-awaited final overtime rule.  In order to be legally classified as exempt from overtime as an executive, administrative, professional, outside salesman, or computer employee, one of the three tests is that you must be paid a minimum salary.  Currently companies only need to pay employees a salary of $23,660 to meet the threshold.  However, effective December 1, 2016, the salary threshold will rise to $47, 476, more than double its current amount.

Who Does the New Rule Effect?

The new overtime rule will impact executive, administrative, professional, outside salesman, and computer employees who work over forty hours in a week and are currently paid less than $47,476.  These employees will now be entitled to an overtime rate of time-and-a-half their regular rate of pay for all hours worked over forty.

Employers have several different options to cope with the new overtime rule.  The most obvious is to keep the employee’s salary the same, but start paying overtime for all hours worked over forty.  If the employer does not want to track all of the employee’s hours, it can simply raise the employee’s salary at or above the $47,476 salary threshold.  The employer can also choose simply to limit the workers’ hours to forty per week.