Starting last summer, employers began preparing to comply with the Obama administration’s revisions to the Fair Labor Standards Act (FLSA) regulations for the executive, administrative, and professional overtime exemptions (“white collar” exemptions). If implemented, the revised overtime rule would dramatically expand the number of workers eligible for overtime pay and would impact most U.S. employers. Because of legal challenges to the new rule, however, its validity has been up in the air for nearly a year. And the change from the Obama to Trump administration only created more uncertainty for employers. Right before the Labor Day weekend, a federal court in Texas issued an order invalidating the new overtime rule. Although we expect challenges to the court’s ruling, and the Trump DOL may propose its own revisions, the court’s order provides employers grappling with the proposed changes to the overtime exemptions with some clarity.
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