Federal Overtime Rule Changes Since 2016
In 2016, a new Federal Overtime Rule that would have extended overtime eligibility to nearly 4 million Americans was blocked by Judge Amos L. Mazzant III of the U.S. District Court. This injunction prevented the new rules from taking effect on December 1, 2016. Employers were not required to pay overtime in accordance with the new rules while the injunction was in effect.
However, this injunction was temporary, and the next step was for the judge to decide whether to make his ruling permanent. If he had agreed, employers would not have had to comply with the new regulations. On the other hand, if the ruling had been overturned or the judge had changed his mind, it would have been unclear whether the regulations were effective retroactively to December 1, 2016.
Updated 2019 Overtime Regulations Increased Salary Thresholds
The legal process has continued, and the Department of Labor (DOL) has been working on a new overtime rule. In 2019, the DOL issued a final rule updating overtime regulations. The new rule increased the salary threshold for employees exempt from overtime pay from $455 per week to $684 per week (equivalent to $35,568 per year). This new rule took effect on January 1, 2020.
New Rule Change Proposal Expected in 2023
A new overtime rule change is expected to be announced in May 2023. The details of the proposed changes have yet to be discovered, but the rule is expected to affect the salary threshold for overtime eligibility. Employers should stay informed about these potential changes and be prepared to adjust their policies and practices accordingly. Employers must ensure compliance with all applicable labor laws and regulations to avoid legal and financial risks. As more information becomes available about the new overtime rule change, employers should consult with legal counsel to understand the implications and make any necessary adjustments.
Skilled Legal Counsel Can Help Business Owners Ensure Compliance
Business owners must be aware of the potential for future changes to overtime regulations and stay up-to-date on any developments in this area. Staying informed and proactive about compliance with labor laws and regulations can help you avoid unnecessary risks. It is vital for employers to keep in mind that state laws may also have different or more stringent overtime regulations, so it is essential to review both federal and state regulations to ensure compliance.