Federal Judge Blocks $44k and $59k Overtime Rule Nationwide: The 6 Questions Employers Should Answer to Plan Immediate Next Steps

Summary

A rule that was set to dramatically boost the salary threshold for the so-called "white collar" overtime exemptions was just halted by a federal judge less than two months before the full effective date. The U.S. Department of Labor (DOL) exceeded its authority by raising the threshold too high (in two phases from $35K to $44k and then $59K) and allowing for automatic adjustments every three years, according to the court. The judge not only struck down the phase-two increase to $59K set to take effect on January 1 but also knocked down the first boost that took the salary floor to $44K in July and the automatic three-year adjustments – setting the threshold back to roughly $35K for now. While we expect the DOL to appeal the ruling, we don't think the incoming Trump administration will pick up the legal battle in January – which means employers have some critical decisions to make on how you want to move forward with your compensation plans. Here's what you need to know about today's ...