All employers should now be aware of the big changes to the DOL’s salary threshold required for an employee to be exempt from overtime take effect in December 2016. A group of states and business groups has now filed lawsuits challenging the new regulations. The lawsuits challenge both the general increase itself, claiming the increase was raised too drastically, as well as the new provision for an automatic increase in the salary threshold every three (3) years.
The challenge to the increase generally is not expected to be successful. The DOL has had the power to change the salary threshold for decades. More uncertain, however, is whether the challenge to the automatic increases will be successful. This is the first time such a provision has been included in the regulations, and some argue the DOL is not authorized to make that change.
These lawsuits are something to keep an eye on in the coming months and years as the automatic increases will have a big effect on businesses if they remain effective.