Overtime Rule Stopped
Just a week before the December 1, 2016, effective date, the U.S. 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.
This means that 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 that 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), as long as they otherwise qualify for exemption.
Employers that took steps to raise the salaries of exempt employees will have to carefully consider their next steps, as taking back salary increases will likely create an employee relations problem, and as of right now, the decision on the rule is temporary.
The theme for employers this holiday season seems to be uncertainty as we adjust to the injunction and prepare for the new administration. Stay tuned for more information throughout the week.
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