👏 Awesome News in for Employers and HR Compliance Nerds: Federal Court Blocks New Overtime Rule
Did I predict this, or did I predict this?
(I did predict it. Check out one of my June 2024 blog posts if you want proof. It starts with “How does a 65% raise sound to you?”)
Last Friday, a Texas federal judge struck down the Department of Labor’s 2024 Rule that would have significantly increased the minimum salary threshold for overtime exemption on January 1, 2025.
The court found that the DOL exceeded its authority by setting the salary threshold at a wicked high threshold of $58,656.
But wait – there’s more!
The court even reversed the $43,888 salary threshold that went into effect this past July! (By the way, i did NOT predict that one.)
This ruling resets the Federal salary threshold back to $35,568, with no planned increases.
What Should You Do Now?
If you’re one of the many, many employers who’ve been scrambling to figure out which employees should get moved to an hourly status and which employees should get salary increases up to the new minimum – including a handful of my own clients — relax and enjoy your Thanksgiving.
But when the holiday week is over, there’s still work to be done if you want to protect your company from accidentally violating the parts of the Wage & Hour laws that are NOT going away.
- Re-evaluate employee classifications based on both duties AND pay
- Ensure accurate classification of roles as exempt or non-exempt
- Be aware of state-specific salary thresholds, which may exceed FLSA requirements in some states
- Talk to your favorite HR consultant (i.e., me) to make sure you’re assessing things correctly.
Does your friend have a question you’d like to ask on their behalf?
You may have a friend who wants to know: Can I retroactively take pay away from people whose salary we increased last July now that it’s no longer the law?
You cannot. They earned it; they keep it.
But if you want, you CAN lower their salary back to its pre-July level starting now. Just first please consider the impact on your company culture, employee morale, and pay equity with others who have similar qualifications, workloads, and responsibilities.
If you’d like to talk about how to lower an employee’s salary in the most humane manner, let me know! I’ve done it lots of times before and can help you do it yourself. Sign up for a free consultation with me and we can get started.
