Stop! Don’t start paying overtime based on the DOL’s new overtime rule.

A federal court has issued a nationwide preliminary injunction blocking the implementation and enforcement the United States Department of Labor’s new overtime rule. You can read the decision here: State of Nevada, et al. v. United States DOL, et al.

As of December 1, 2016, the rule would have increased the minimum salary level for executive, administrative, and professional employees who are exempt from the overtime requirements of the Fair Labor Standards Act (“FLSA”) from $455 per week ($23,660 annually) to $921 per week ($47,892 annually). This increase is no longer happening. If your business pays its bona fide executive, administrative, or professional employees more than $455 per week on a salary basis, you do not have to pay them overtime.

There is a possibility that this decision will be reversed in the future. Either Judge Mazzant could change his mind before issuing his final ruling, or his decision could be overturned by the Fifth Circuit court of Appeals (less likely) or the Supreme Court (more likely). Your business should plan for this possibility by mothballing its current conversion plan. It may need to be implemented down the line.

If you have already begun converting pay plans based on the new DOL rule, you can reverse the decision for at-will employees. Please feel free to contact me at (470) 839-9300 or beau@freedhoward.com to discuss a strategy for handling this new development.

Leave a Reply