Federal Overtime Changes Delayed by Court Ruling

Erick J. Becker

Erick J. Becker

Federal regulations changing the minimum salary for exemption from overtime that were scheduled to go into effect December 1 have been delayed by a federal judge in a recent court ruling.  The regulations were challenged by a number of states on the grounds the Department of Labor exceeded its authority, and the judge issued a temporary restraining order on November 22 prohibiting implementation.  The judge will be considering a permanent injunction in the next few weeks, and it is expected the injunction will be granted.  The incoming Trump administration will also have an opportunity to roll back the regulations, although the procedure for doing so is somewhat complicated.

For California employers contemplating increases to employee salaries to comply with the new regulations, any plans can be put on hold pending the decision on a permanent injunction.  However, if employers have already announced the increases to the affected employees, it would be prudent to consider the employee relations impact of withdrawing the increase before making your decision, particularly since the California minimum exempt salary is scheduled to catch up to the proposed federal standard of $47,436 in a few years.