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Update on New Federal Overtime Rules: FLSA Overtime Exemption Rule Revision Blocked

FLSA Overtime Exemption Rule Revision Blocked by Federal Judge

Photo Credit: Leo Reynolds Flickr via Compfight cc

Many employees had been looking forward to new revisions in the Department of Labor's overtime exemption rule, which was set to take effect on December 1, 2016. These revisions would have doubled the salary requirement for white collar employees who were eligible for overtime pay.

Four million Americans would have been eligible for overtime compensation whenever they worked above and beyond their normal forty-hour work week. However, the revision was blocked by a federal judge in Texas before the rule could take effect; this means that there will be no change to the overtime exemption rule after all.

The Current Overtime Exemption Law

The current overtime exemption law requires that certain white collar employees who are salary employees and make more than $23,660 per year are exempt from earning overtime pay. White collar employees include workers who hold a position that is executive, administrative or professional in nature. Any white collar worker who works more than forty hours in a week and earns less than the set amount in salary compensation is to be paid a rate that is one and a half times as much as the regular pay rate for each hour above and beyond the required forty hours a week. There is also a high-earning employee exemption where high-earning employees must make less than $100,000 dollars annually and perform at least one "qualifying task" in order to be eligible for overtime pay.

What the FLSA Overtime Revision Would Have Meant For Employees

The revision to the overtime exemption law would have raised the salary requirement for white collar workers to $47,476, and to $134,004 for highly-compensated employees, making more employees eligible for overtime compensation. The revision to the rule would have required that the newly identified salary levels be subject to automatic adjustments every three years to compensate for inflation. In fact, the whole purpose of the revision to the overtime exemption law was meant to address the issue of inflation, which has long been overlooked with regard to the exemption law. The blocked revision was meant to help boost workers' wages, and the intended consequence of changing the law was to provide a much-needed jolt to slow-growing incomes in the United States.

Federal Judge Blocks Overtime Exemption Rule Revision Days Before Effect

On December 1 2016, circumstances could have become very different for workers across the country with the implementation of the revised law. However, during Thanksgiving week, U.S. District Judge Amos Mazzant III blocked the law revisions from taking effect by issuing a preliminary injunction. The judge issued the injunction amidst concerns that the revision would increase government costs in individual states, increase business salary expenditures, and increase the instances of eventual employee layoffs due to increased costs. This ruling is only preliminary in nature, which means that the revision could possibly be reinstated.

Overtime compensation issues affect many employees in California. If you are concerned that you are not receiving overtime pay, please consult with an experienced California employment attorney at Hennig Ruiz for a free consultation today.

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