January 04, 2017 Articles

Taking a Step Back: The Impact of the Sudden Halt on the New Overtime Rules

By Sarah Bradbury and Terah Moxley

Months of confusion—and planning—by employers came to a screeching halt on November 22, 2016, when Judge Amos Mazzant of the Eastern District of Texas issued a nationwide preliminary injunction prohibiting the United States Department of Labor (DOL) from implementing or enforcing new overtime regulations set to take effect just days later. Issued last May, these regulations would have ushered in substantial changes to the overtime rules of the Fair Labor Standards Act (FLSA). Under these new regulations, white collar workers who have historically been exempt from the federal overtime rules would need to be paid more—a lot more—to maintain that exemption. Through these new regulations, the DOL sought to more than double the minimum salary threshold required for the white collar exemptions from $23,600 to $47,476 annually. (Plus, the regulations provided that this minimum salary threshold would automatically increase every three years.) These new regulations were set to make waves particularly for restaurant and retail employers.

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