Operations

Federal Judge Blocks Overtime Exemption Changes

November 23, 2016

Photo via Wikimedia
Photo via Wikimedia

A federal judge has issued an injunction, blocking the Department of Labor's proposed changes to the rules governing overtime. If passed, the changes would have extended overtime to 4.2 million employees.

Currently, administrative or professional employees making less than $23,660 annually must be paid time-and-a-half for hours worked over 40. Under the proposed change, the threshold would be raised to $47,892 annually, with the threshold re-evaluated and adjusted automatically every three years. These changes were expected to make a significant impact on small government fleets, where shop supervisors, lead technicians, assistant managers, service writers, parts managers, and others share this exempt classification and typically work in excess of a 40-hour workweek.

In his ruling, Federal Judge Amos Mazzant agreed with state plaintiffs that the provision to update the salary threshold every three years violates the Administrative Procedure Act, which requires a notice and comment period before changes are made.

The Department of Labor has said that it strongly disagrees with the decision and is currently considering its options, reports Fortune. The agency has the option to appeal, though the appeal could be dropped once President-elect Donald Trump takes office in January.

Although the injunction means that changes will not be made, many employers have already adjusted their pay structure in preparation, as the new provisions were set to begin in Dec. 1, reports the Wall Street Journal.

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