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Judge Blocks Overtime Law Affecting 4 Million Workers

November 23, 2016

2019 UPDATE: See our article on the DOL's final overtime rule for 2020

On Tuesday November 22, U.S. District Judge Amos Mazzant of Texas granted the motion for a temporary injunction of the updated overtime law applied to salaried workers. This blocked the nationwide implementation of the law on December 1 and leaves many businesses in a state of uncertainty. The law was expected to affect over four million salary workers nationwide. The injunction comes after twenty-one states and many business groups voiced their concerns of the impact of the law by filing an emergency motion to halt the law from being implemented.

What the Law Entailed
President Obama signed an executive order that would dramatically raise the annual earnings threshold where salaried workers are exempt from overtime wages. The law planned to raise the amount from $23,660 to $47,476.  After four decades with no significant changes, Obama's order was predicted to affect virtually every industry, especially small businesses, non profits, as well as retail, hotels and restaurants.
What's Next for Employers
The future of the law, set to go into effect December 1, is now up in the air. The temporary injunction can be removed by the judge or appealed by the Department of Labor. However, many believe the injunction will remain in place at least until the upcoming Trump administration can cancel Obama's executive order.

For many businesses, there remains uncertainty on how to proceed. If the injunction is removed, the law could still be implemented. It is even possible through litigation that the law could be retroactivity applied back to the original December 1 date. This would require employers to back pay overtime for salaried workers impacted by the new law. We recommend staying updated on this very fluid issue at the Department of Labor website.

At Redcort Software, we have received a steady stream of calls in recent weeks with questions about the new law and ways that employers can simplify tracking overtime hours for salaried employees. We've appreciated the opportunity to help many employers to begin using our Virtual TimeClock software to easily track their employee hours and overtime. We offer a free trial of Virtual TimeClock without any cost or obligation.

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