A rule that once presented a wage-and-hour compliance juggernaut for employers just suffered a blow that might sink it for good — at least in its current form.
On Aug. 31, a federal judge in Texas invalidated an Obama-era rule that would have made an estimated 4.2 million more American workers eligible for overtime pay. Finalized May 2016, the rule would have doubled the minimum wage rate white-collar workers would have to receive in order to be considered ineligible for overtime pay under the Fair Labor Standards Act.
With the rule struck down, and with a Trump administration Labor Department less likely than its predecessor to press the issue on appeal, the question remains as to whether the overtime rule’s road ends in Texas, and what that means for U.S. employers.
Executive, administrative and professional employees can be exempted from overtime pay under the FLSA as long as they meet an earnings requirement as well as perform certain types of duties. The statute enables the DOL to “define and delimit” overtime exemptions for these white-collar workers regarding these salary and duties tests.