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Federal Judge Blocks Implementation of New Overtime Exemption Rule

On November 22, 2016, a federal judge in Texas issued an injunction against the Department of Labor’s new overtime exemption regulations that were scheduled to take effect on December 1, 2016. The regulations would have required employers to pay time-and-a-half to their employees who work more than 40 hours a week and earn less than the annual salary threshold of $47,476. The suit was brought on behalf of 21 states and dozens of business groups who feared the new regulations would hurt retailers and other small businesses by adding to their labor costs. Those against the new overtime exemption rule also said that it would have forced employers to convert full-time jobs to part-time jobs.

The court’s decision came at a time when employers attempted to adjust employee schedules, job responsibilities and titles, as well as salaries, just before the overtime exemption rules went into effect. According to the Wall Street Journal, employers who have already implemented actions to be in compliance with the new rule, including raising the salary threshold for overtime pay or eliminating job categories, did not have plans to change course.

Currently, employees who are paid hourly receive time-and-a-half if they work more than 40 hours a week or more than eight hours in one day; however, salaried employees are not covered under current regulations. Under current overtime exemption rules, a salaried employee may receive time-and-a-half pay if they make less than $455 a week, or $23,660 a year. The new overtime exemption would have raised the weekly salary threshold to $913, or the annual salary threshold to $47,476, and would have extended time-and-a-half pay for an additional 4.2 million workers.

Navigating the ever-changing regulatory laws surrounding business practices can be difficult and time-consuming for New York business owners. It is important that employers consult the guidance of an experienced New York business law attorney who is knowledgeable in local, state and federal regulations and can help you implement strategic business practices to stay in compliance with the law and avoid fines. To contact the New York business law attorneys at Blodnick Fazio & Associates, PC, call (516) 280-7105.

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