New Overtime Rules – Hold the Phone!

Today we’re featuring a guest post by Jennifer Carsen, J.D.,
BLR employee benefits editor.

CalculatorIt was a final-seconds-of-the-game Hail Mary pass that paid off: On November 22, right before the new overtime rules were set to go into effect on December 1, the United States District Court for the Eastern District of Texas granted an emergency motion enjoining the Department of Labor (DOL) from enforcing the new overtime rule on a nationwide basis.

What does this mean for employers? Until further action from the courts, Congress, or the new administration, the minimum salary threshold for the white collar exemptions will remain where it has been since 2004, at $455 a week. The salary threshold for the highly compensated employee exemption will remain at $100,000 per year.

For employers who made plans to reclassify employees as nonexempt rather than raise their salaries to the $913 per week level that was included in the new rule, these employees may continue to be treated as exempt (for now) so long as they otherwise qualify for exemption.

Employers who took steps to raise the salaries of exempt employees will have to carefully consider next steps as taking back salary increases will likely create an employee relations problem. It’s also important to note that the court issued a preliminary injunction only, so as of right now, the decision on the rule is temporary.

Stay tuned here at CompAble and for more information as it becomes available.

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