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HR and compliance teams worried about a regulatory change increasing overtime eligibility for white-collar workers can stop fretting—for now.
What happened? On Friday, a federal judge in Texas blocked a change to the Fair Labor Standards Act (FLSA) that would have increased the annual salary threshold for white-collar workers qualifying for overtime to $58,656. The judge, who was appointed to his role by President-elect Donald Trump during his first term, ruled that the Department of Labor overstepped its authority by determining the salary threshold based on pay instead of job duties. The decision keeps the salary threshold at $35,568, which was set in 2019.
In some ways, the ruling helps HR teams avoid a compliance headache: Even if the rule had gone into effect, some employment attorneys speculated that the incoming Trump administration would have struck it down. In anticipation of such a scenario, experts who spoke with HR Brew cautioned people teams to have contingency plans in place, so that they could roll with the punches amid potential regulatory changes.
What’s next? It’s not clear if the Department of Labor will appeal the decision. If it were to request a review, it would go to the most conservative federal appeals court, according to Reuters. Either way, the Trump administration could still rescind the rule.
Despite the change, people pros would be wise not to throw out any contingency plans just yet. There’s a chance that the Trump administration might propose its own salary threshold increase, as it did in 2019, though it would likely be lower than what the Biden administration proposed.