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Proposed overtime salary threshold increase blocked by court

Business owners in New York might be interested in learning that the Obama-era wage-and-hour rule that would have increased the salary threshold for overtime eligibility to $47,000 per year was blocked by a federal court. A judge in Texas stated that the salary threshold was simply too high and would result in many managers being eligible for overtime pay.

The rule would have made non-exempt employees making less than $47,000 per year eligible for overtime pay even if they were salaried. The judge also stated that the Department of Labor was able to use a threshold salary as a benchmark for determining overtime eligibility, but he also ruled that the combination of duties as well as the salary were factors when determining whether or not an employee should be paid overtime.

Pro-business groups had opposed the greatly increased salary threshold, arguing that it would harm small businesses. Labor groups had supported the rule. In the current anti-regulatory environment, it was unclear whether or not the federal government would have moved forward with enacting the regulation even if the court had not blocked its implementation.

Wage and hour laws are much more complex than some business owners might realize. It is important for businesses to make certain that they have classified their employees correctly so that they might avoid costly litigation. Employment law attorneys who are experienced in representing businesses may help their clients to make certain that they have classified their exempt and non-exempt employees correctly. They may also help their clients to understand the rules that must be followed when classifying a worker as an independent contractor instead of as a statutory employee.