Remember That New Overtime Rule That Was Going to Happen? Not Any More.

Remember that Obama overtime rule that would have required employers to pay overtime to most salaried workers earning less than $47,476 annually (up from the current salary cutoff for overtime pay of $23,660)? Employers were struggling to find ways to deal with what would have been a significant change in wage and hour law. That struggle is over; the rule is effectively dead.

Last week, a federal judge in Texas struck down the rule. In his decision, Judge Amos Mazzant said the DOL overstepped its authority by focusing too heavily on workers' pay, rather than their job duties, to determine overtime eligibility. Then, on September 5, the Justice Department announced that it will not appeal the previous decision issued by Judge Mazzant that temporarily blocked the rule. However, it is still possible that the Justice Department could appeal the most recent ruling, perhaps to seek clarity on how and when the DOL can use workers' salaries for overtime eligibility determinations.

It has been reported that the Labor Department is already reconsidering the rule, and has asked for public comment. Labor Secretary Alexander Acosta has signaled that the DOL may issue a new rule with a more moderate salary threshold bump, potentially in the low $30,000 range. We will continue to monitor all developments.