Overtime Rule Halted by Texas Federal Judge

A mere 10 days before the new federal overtime rules are set to take effect,  a federal judge out of Texas has put a halt to the Department of Labor’s  new overtime rule. Many employers were anxiously preparing for the new regulations, which would mandate as of December 1, 2016 that all employees classified as exempt earn a minimum of $47,476 annually; a significant jump from the previous federal threshold of $23,660 annually and California’s minimum threshold of $41,600 annually.

What does this mean for businesses? As of now, employers may continue to comply with the current overtime rules in place. Employees who may have been considered for transition to non-exempt classifications to avoid the hike in salary, may remain classified as exempt as long as all other exemption requirements are met. Those employers who proactively increased employee wages to comply with the new overtime rule may want to consider keeping the new wages in place or talk to their HR/Employment expert to discuss the best strategy forward.

Although the new ruling has been postponed, employers should still be on the lookout for future changes, as the injunction is not permanent and the DOL’s new overtime rule could be reinstated at a later date. In any case, the path forward for this new overtime rule will likely face significant challenges given the incoming presidential administration and Republican control of both the House and Senate, who have predominately opposed the new overtime rules.