Overtime Rule Temporarily Frozen
Last Tuesday, a federal court judge in Texas issued a preliminary injunction temporarily blocking the U.S. Department of Labor from implementing and enforcing the overtime changes originally set to become effective on December 1, 2016. This "Overtime Rule" would have raised the exempt level salary threshold from $23,660 to $47,476, forcing employers to convert salaried employees under $47,476 to hourly status or raise those employees above the new threshold to remain exempt.
At this time, the Overtime Rule will not take effect on December 1 as scheduled but could be implemented at a later date. Therefore, employers can continue to follow current overtime regulations until the court has ruled on this case. We know that many employers have already made adjustments to raise exempt level employee salaries to meet the new standards or to reclassify employees to nonexempt if they do not meet the new salary standards. Employers will need to consider the impact this temporary injunction has on their organization and determine whether or not it makes sense to continue with the reclassification and/or salary adjustment process.
Keep in mind that the overtime rule has not been permanently stopped, and all employers should have a backup plan ready should the overtime rule be reinstated. For more information regarding this recent change, please click here.
Feel free to contact the Morrison People Solutions Team by email at firstname.lastname@example.org or call us at 530-893-4764 with any other questions or concerns.