On May 18, 2016, the Department of Labor announced new regulations governing eligibility for overtime pay. The new regulations were to go into effect on December 1, 2016, and raise the minimum salary threshold for an employee to be classified as exempt (i.e., not eligible to receive overtime pay if working more than 40 hours in a week). Under the terms of new regulations, the salary threshold was to be updated every three years to keep it at the 40th percentile for salaried, full-time workers in the lowest-income region of the country. The first update was scheduled to take place January 1, 2020.
Shortly after the regulations were issued, 21 states sued to block the regulations from going into effect and on November 22, 2016 a federal judge ruled in the states’ favor.
July 2017 Update: The Trump Administration announced that it will not defend the Obama regulations, effectively killing them. Therefore, colleges and universities do not need to adjust the salaries or hours for their employees to comply with the regulations. However, the Administration asked a federal court to decide if the Department of Labor had the right to set overtime eligibility using a worker's salary. The Court has not made a decision on this question. NACAC will continue to monitor the status of the regulations and provide updates as appropriate.
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