Federal Judge Strikes Down Overtime Rule
What happened?
The new overtime threshold rule, which we covered back in April 2024, was struck down by federal judge Sean Jordan in Texas on Friday November 15th. Judge Jordan sided with the state of Texas, and a group of business organizations which argued that the Department of Labor exceeded its authority when they finalized and published the rule in the Federal Register. The DOL rule would have been the biggest increase to the salary threshold in decades and was estimated to make around 4 million workers eligible for overtime protections.
What was the rule?
The blocked rule increased the salary threshold to guarantee overtime pay to workers that make up to $55,068 (or $1,059 per week) from the previous overtime threshold which was $35,568 per year (or $684 per week). The salary would have increased in two phases- first to $43,888 on July 1, 2024, and then to $58,656 on January 1, 2025. This new rule also included a provision which would have automatically updated the salary threshold every three years. Additionally, the rule raised the threshold for the “highly compensated employee” exemption to $143,988 from the previous threshold of $107,432.
What to do now?
While we cannot predict what will happen with the overtime rule, it is important to note that there still may be an appeal from the DOL. With the impending administration change in January, it is to be determined whether the Trump Administration will continue the appeal.
With the ruling, the DOL will revert to the previous $35,568 overtime threshold for workers. However, if you already updated the overtime threshold to $43,888, please contact one of our attorneys for guidance today.
How can we help?
The expert employment attorneys at myHRcounsel can help you understand the new ruling on the overtime rule and how to comply. If you are already a subscriber, you can login and open a ticket at any time. To learn more about our unlimited access to employment attorneys for an affordable subscription, request a demo or contact us at info@myHRcounsel.com.