Judge Blocks New Federal Overtime Rule From Taking Effect Dec. 1

SDRA, National Retail Federation & Jackson Lewis, PC  11/22/2016

A new federal overtime pay requirement that was set to go into effect on December 1, 2016 has now been placed on hold. A U.S. District Judge in Texas has issued a preliminary injunction in a lawsuit brought by 21 states and dozens of business groups. Among other things, the rule raised the threshold for the white collar exemption to $47,476 from the current rate of $23,660, requiring overtime pay for salaried employees earning less than $47,476 per year.

The November 22 ruling means for the time being, employers will NOT have to change the way they pay their salaried employees who work more than 40 hours in a 7-day workweek.

The new overtime pay rules are effectively “paused” until the courts reach a final decision on their legality. At this point, we don’t know when that will be, but SDRA will keep our members informed of any changes as they occur.

Read more about the ruling from the employment law firm of Jackson Lewis, P.C. at this link: http://www.jacksonlewis.com/publication/texas-court-grants-nationwide-preliminary-injunction-enjoining-department-labor-implementing-or-enforcing-regulation

Research conducted for the National Retail Federation by Oxford Economics found that the new overtime regulations would force employers to limit hours or cut base pay in order to make up for added payroll costs, leaving most workers with no increase in take-home pay despite added administrative costs. A separate survey found that the majority of retail managers and assistant managers the regulations are supposed to help oppose the plan, citing losses in schedule flexibility, benefits and professional development opportunities that would come with switching from salaried to hourly positions. Read more in this news release from the National Retail Federation: https://nrf.com/media/press-releases/retailers-welcome-court-issued-timeout-overtime-rules