Great News for Businesses: No Changes to Overtime Rules

September 06, 2017

Remember last year when many of us were trying to figure out how to handle the new overtime rule? You know, the one that more than doubled the salary threshold for exempt employees? The one that would have made more than 4 million more employees eligible for overtime with a significant financial impact on thousands of small businesses?

And then we held our breath when U.S. District Judge Amos Mazzant issued a temporary injunction against the rule in November 2016.

Well, take another breath – a deep breath of relief. On August 31, Judge Mazzant issued a final ruling against the 2016 overtime rule.

What does this ruling mean for your business? Essentially, it’s business as usual and you don’t need to make any changes.

Those watching the issue closely don’t anticipate that the Department of Labor will appeal the decision., but that doesn’t mean the conversation is over. The salary threshold ($23,660) hasn’t increased since 2004, so it’s not out of the question that it may be adjusted upward in the future.

PaySmart will keep an eye on any developments and share important updates impacting your small business.

The Backstory:

In early 2016, the Department of Labor updated federal overtime regulations to go into effect December 1, 2016. This would have impacted more than 4 million workers and scores of businesses. Here are a few highlights of the proposed changes:

  • What is the current salary threshold? $23,660 annually or $455 per week. Most salaried workers making less than the threshold are eligible for overtime pay.
  • What was the proposed salary threshold? $47,476 annually, or $913 per week.
  • What about bonuses and commissions? Employers would have been able to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level.

In November 2016, Judge Mazzant issued a temporary injunction against the proposed changes. On August 31, 2017, he issued a final ruling against the proposed changes.