DOL’s Overtime Rule Blocked By Texas Judge

DOL’s Overtime Rule Blocked By Texas Judge

by Laura C. McHugh, Esq.

On November 22, 2016, a Texas federal judge entered a nationwide injunction blocking the U.S. Department of Labor from implementing a new rule that would have increased the minimum salary for the federal “white collar” overtime pay exemption to $47,476 per year. The new law was to take effect December 1, 2016, but employers are at least now relieved from paying the new $47,476 federal minimum salary to meet the overtime exemption. The DOL has appealed the injunction issued against it.

California employers may continue to rely on the minimum salary requirement set forth under California law, which is two times the minimum wage, currently $20.00 per hour ($10.00 per hour x 2) or $41,600 per year. Employees also must meet the job duties test to qualify for the overtime exemption – set forth in the applicable Wage Order.

Note: the California minimum wage increases to $10.50 per hour on January 1, 2017 for employers with 26 or more employees, and to qualify for the overtime exemption, an employee would have to earn at least $21.00 per hour ($10.50 x 2) in addition to satisfying the other criteria required for the applicable exemption.