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 Obama’s Proposed Overtime Rule is Overruled

In 2016, the Department of Labor issued a new overtime rule under the Fair Labor Standards Act (FLSA). The new rule was scheduled to take effect on December 1, 2016; however, prior to the new rule taking effect a federal court in Texas issued a nationwide temporary injunction. On August 31, 2017, that federal court followed up its injunction with a ruling invalidating the new overtime rule permanently. What if any action the Department of Labor will take in light of this ruling is unclear.
In light of the uncertainty regarding potential changes to the federal overtime rules, employers should do the following:

  1. Remain vigilant in applying the current rules to determine whether an employee may be classified as overtime exempt.
  2. Bear in mind that regardless of whether an employee meets the salary threshold of $455/ week they must also satisfy the duties test for overtime exemption.
  3. Engage an employment attorney to conduct an objective audit of the overtime classification of their workforce to ensure compliance and avoid costly investigations and enforcement actions.

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PK Law’s Human Resources’ Tips (HR Tips) are designed to be helpful and thought provoking, but should not be considered legal advice as they may not be accurate for use in all situations.