On November 22nd, a federal judge in Texas halted the implementation of a new government rule on employees eligible to receive overtime pay.
Under federal law, employers must pay certain workers overtime pay (i.e., “time-and-a-half”) if they work more than 40 hours in a workweek. The question with which employers have always struggled has been, “which workers must be paid overtime and which do not?” Under current law, employees making more than a certain amount ($23,660) and whose duties are of a certain character (e.g., managerial or professional) are ineligible for overtime pay. Employees earning less must be paid overtime.
In May of this year, the federal Department of Labor issued a new rule on overtime pay. Under the new rule, employees who do not earn at least $47,476 per year must be paid overtime, even if they are managerial or professional employees. The new rule would extend overtime pay to 4.2 million employees not currently entitled to it. The new rule also provides for an increase in this salary threshold every three years.
The new rule was to have taken effect on December 1st. The Texas judge’s decision delays its effective date, meaning that employers may continue to pay overtime under the existing rule.