In a decision made by the U.S. District Court of Texas, the Department of Labor’s (DOL) new overtime regulations that were to take effect next week have been delayed. This preliminary injunction does not block the new regulations permanently, but it will maintain the status quo until the court can decide on the validity of the final rule.
The new overtime rule, which was to take effect on December 1st, would have more than doubled the exempt salary threshold from $455 per week ($23,660 annually) to $913 per week ($47,476), provided a consideration of up to 10% in bonus pay, and would automatically adjust the salary threshold every three years. This would be a noticeable change from the current regulations, which went into effect in 2004.
Since the new regulations were announced there has been growing concern regarding the drastic change in salary level threshold and how it would affect small businesses and non-profits. In an effort to delay or block the regulations, the US Chamber of Commerce along with more than 50 national businesses and 21 states filed separate suits, and in October those suits were combined into one case against the DOL.
Many employers have already raised salaries or reclassified employees to comply with the anticipated December 1 deadline. Employers will likely choose to maintain any salary increases already provided in preparation; at this point it would be difficult to reverse. However, employers may want to hold off on the reclassification of exempt employees to non-exempt, if those changes have not already been made.
The delay in the decision does not guarantee that the regulations will be rendered invalid. If the court upon further review determines the rule valid, it will simply only delay its implementation.
If you have any questions, please don’t hesitate to contact BSSF today!
ABOUT THE AUTHOR
Susan T. Yohn, SPHR, SHRM-SCP
Director of Human Resources
Susan manages all areas of the HR Department as well as consults with clients on topics including, but not limited to: recruitment, orientation, employee relations, compliance with HR related laws, employee benefit plans, Family and Medical Leave Act (FMLA) and Workers’ Compensation.