November 18, 2024
Were you concerned about the January salary hike to qualify for the wage/hour overtime exemption? Worry no more.
A Texas federal judge has blocked the Biden administration’s overtime salary rule, issuing a nationwide injunction just weeks before it was set to take effect. The rule would have raised the salary threshold for exemption from overtime pay to $58,656, a change that small businesses and non-profits most especially warned would strain budgets and force cuts to jobs or hours. Not only does the ruling upend the upcoming increase, but also the increase this past July to $43,888. (Practically speaking, however, reducing employees’ pay that was increased for the July deadline would be difficult.)
Judge Sean D. Jordan of the U.S. District Court of the Eastern District of Texas ruled the Department of Labor exceeded its authority by focusing too heavily on salary alone, sidelining the consideration of job duties. This nationwide ruling prevents the salary rule from going into effect and provides relief to employers across the United States. While worker advocates supported the measure, any appeal of the decision will go to the conservative Fifth Circuit Court of Appeals, making it unlikely the rule will be reinstated anytime soon, if at all. Further, the incoming Trump administration could decide not to pursue an appeal and to change the rule.
We are closely monitoring this development and will continue to provide updates as the situation evolves. If you have any questions or concerns, please don’t hesitate to reach out to the HunterMaclean Employment practice group by visiting their page or by phone at (912) 236-0261.
