A federal judge blocked the December 1st rollout of the Department of Labor rule that would increase the minimum salary threshold (from $23,660 to $47,476) for the “white collar” exemption from overtime pay. The ruling took place on November 22nd, just 10 days before the new overtime rule was supposed to go into effect.
The decision favored the 21 states that filed an emergency motion to block the rule and business groups that claimed the rule was unlawful, arguing that that the Department of Labor exceeded it’s authority when it increased the minimum salary threshold.
What this Means for Employers
The increase to the minimum salary requirement is now on hold nationwide, leaving the current regulation and criteria – from 2004 – in place until further notice.
Under the Fair Labor Standards Act (“FLSA”), employees are – by default – eligible for overtime pay for all hours worked over 40 hours per week. Overtime pay is generally calculated at 1.5 times the employee’s regular rate of pay. Certain employees may be exempt from overtime depending on how they are paid, how much they are paid, and the job duties they perform. There are several exemptions under the FLSA (including the “white collar” exemption) and it is important to learn more about each exemption in order to ensure your employees are correctly classified under the law.
Until a final decision is reached on the proposed change to the minimum salary threshold, in order to be exempt under the “white collar” exemption, an employee must be paid on a salary basis, be paid more than $23,660 per year or $455 per week, and primarily perform executive, administrative, or professional job duties.
To learn more about this injunction, the FLSA, and how these changes affect you, check out our recently updated Must-Have Guide to Overtime and FLSA.