FSLA: Federal Judge Postpones the Start of the New Overtime Rule
The Department of Labor’s new federal overtime rule, which was to take effect on December 1st, has been temporarily postponed under a preliminary injunction by a federal judge in Texas. Under the new rule, the Fair Labor Standards Act’s salary threshold for employees to be exempt from overtime pay was to be raised from $23,660 to $47,476 (or $455 weekly to $913 weekly). In other words, the new FLSA rule would require any employee not making at least $913 a week to be considered hourly (non-exempt) and be eligible for overtime pay rates for any hours worked over 40 in one pay week (or 7-day work week). The new rule also proposes to establish an automated updating mechanism to adjust the threshold every three years. The current nationwide injunction postpones the implementation and enforcement of the FLSA’s revisions.
For now, the new overtime rule will not take effect as planned December 1st, but it still could be implemented at some later date. As an employer, you should continue to follow the existing overtime regulations until a decision is reached – meaning an employee must currently make at least $255 per work week to be classified as exempt/salary and exempt from overtime pay. If you have already raised an exempt employee’s salary to meet the proposed threshold or if you have reclassified your employees from exempt (salary) to non-exempt (hourly), you will more than likely want to leave those decisions in place for now. However, if you have not made any changes, such decisions and transitions can be postponed until further notice.