Dive Temporary:
- The U.S. Division of Labor’s Wage and Hour Division introduced Thursday it was rescinding the embattled Biden-era overtime rule, greater than a 12 months after federal courts vacated the 2024 rules. The rule took impact Friday.
- The 2024 rule raised the earnings threshold to qualify for extra time to $844 per week in July 2024, from the 2019-issued threshold of $684 per week. It was then set to extend once more to $1,128 per week on Jan. 1, 2025, and would have elevated periodically from then on.
- In late 2024, two Texas district courts vacated that 12 months’s last rule. After DOL dropped its appeals of the selections earlier this month, the fifth U.S. Circuit Court docket of Appeals dismissed the instances and the orders stay last judgments, DOL mentioned.
Dive Perception:
This rescission of the 2024 final rule is unsurprising given President Donald Trump’s administration signaling it might revisit the rule, Keith Kopplin, co-chair of Ogletree Deakins’ wage and hour follow group, and Zachary Zagger, senior advertising and marketing counsel at Ogletree, mentioned in a weblog publish.
Again in September, DOL did say as much: On its agenda, together with joint employer standing and unbiased contractor classification, DOL mentioned it “will decide whether or not sure salaried staff are exempt from FLSA minimal wage and extra time necessities.”
Kopplin mentioned that with this rule, Trump’s DOL is restoring the edge to the degrees of the 2019 rule. “Notably, this removes the 2024 rule’s computerized triennial threshold changes,” Kopplin added.
What else ought to HR be mindful? The wage threshold is just one a part of the three-part conjunctive take a look at, Jim Paretti, a co-chair of Littler’s Office Coverage Institute, mentioned by way of electronic mail.
Together with incomes the minimal wage, to be exempt beneath FLSA, the worker “should be paid a hard and fast, predetermined sum every week whatever the amount or high quality of the work they carry out,” Paretti mentioned, outlining the “wage foundation” take a look at. Likewise, the worker’s “major work should be the efficiency of exempt EAP duties,” he mentioned, which is named the “duties take a look at.”
“Merely incomes above the edge doesn’t make an worker routinely exempt. The place that criterion is met, employers should nonetheless make sure that the worker is paid on a salaried foundation (versus hourly or by the piece), and that their work is primarily performing duties that fall inside the ‘duties take a look at’ exemption,” Paretti mentioned.
“The Wage and Hour Division is dedicated to making sure that its rules precisely replicate the right requirements and necessities that we implement,” WHD Administrator Andrew Rogers mentioned in an announcement. “It’s crucial that every aspect of the part 13(a)(1) exemptions – duties, wage foundation, and wage stage necessities – be clearly framed for the advantage of each staff and employers.”
Trying forward, DOL also has expressed intent to iron out standard salary levels for employees within the U.S. territories of American Samoa, Guam, Northern Mariana Islands, Puerto Rico and the U.S. Virgin Islands, in addition to for expertise within the movement image business.
