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Court Blocks Implementation of the Department of Labor’s Overtime Exemption Threshold Increase: The Status Quo Remains

Last month, a federal judge in Texas stayed implementation of the Department of Labor’s controversial rule change which would have nearly doubled the threshold required for employees to be exempt from overtime.  Even though this ruling was by a judge in Texas, it has a nationwide effect – the DOL’s new rule cannot be enforced anywhere in the country.

You may recall that the rule change was originally set to go into effect on December 1.  Among other things, the DOL’s rule change would have required you to pay your executive and administrative exempt employees at least $913 per week (up from $455 per week).  That’s over $47,000 per year!

However, because of the judge’s ruling, the DOL’s rule now cannot go into effect until the judge makes a final determination as to its lawfulness.  Given the incoming administration appears to be hostile to the rule – President-Elect Trump has in the past criticized the rule and stated he’d like to at least see a delay in implementation or a carve-out for small businesses – it’s possible the rule will never go into effect because President-Elect Trump’s Department of Labor will give up the legal fight after he is sworn in.  Therefore, until further notice there is no need to implement any changes to how you pay your white collar workers.

Brody and Associates regularly advises management on complying with state and federal employment laws including wage and hour laws.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560.