“New Overtime Rule” will not go into effect

On August 31, 2017, Judge Amos Mazzant, a federal judge U.S. District Court for the Eastern District of Texas struck down the Obama Administration rule that would have extended mandatory overtime pay to more than 4 million U.S. workers. Many business groups and 21 states had challenged the implementation of the “New FLSA Overtime Rule.”

This decision came after Judge Mazzant enjoined implementation of the rule on December 1, 2016, pending his final decision. The Trump administration had already said it would make changes to the rule, which riled trade groups and companies when it was adopted.

The “New FLSA Overtime Rule” would have doubled the maximum salary a worker could earn to about $47,000 and still be automatically eligible for overtime pay. Judge Mazzant commented that the salary level was set so high that it could sweep in some management workers who are supposed to be exempt from overtime protections.

Before 2016, federal overtime pay regulations had not been changed since 2004, when the salary level was set at $23,660. Several pro-worker groups contend that threshold unfairly excluded many workers who do not perform any management duties.

This means is that the prior salary test-level for exempt status of $455.00 per week or $23,600.00 per year is still the law and will be the law for the foreseeable future.