Update (8/20/19): A replacement for the Obama Administration’s proposed overtime pay rules has been offered by the Trump administration and is scheduled to take effect January 1, 2020. See Richard Hammar’s analysis of the recommended changes in “A Closer Look at New Overtime Rules Taking Effect in 2020.”
New overtime rules that were set to take effect on December 1 have been put on hold after a nationwide injunction was handed down late Tuesday, November 22, by a federal judge in Texas.
The changes would have significantly increased the salary threshold used under the Fair Labor Standards Act to determine which white-collar employees are eligible for overtime pay. The US Department of Labor passed the new standard in May at the request of President Obama. The modification would have doubled the current white-collar salary exemption level of $455 per week (or $23,660 per year) to $913 per week (or $47,476 per year).
The DOL estimates more than 4 million workers nationwide, including many nonministerial employees at churches who meet certain criteria, would have become eligible. But many businesses and nonprofits expressed concerns about the economic effects the new threshold presented. This summer, the attorneys general for 21 states challenged the change through a lawsuit filed in the US District Court in Eastern Texas.
US District Judge Amos Mazzant’s injunction blocks the implementation scheduled for December 1. Mazzant will determine a final decision about the legality of the new threshold at a later date.
The potential economic fallout, coupled with the reasonable chances of success for the states’ lawsuit, warranted the injunction, Mazzant wrote in his ruling, according to Forbes.com writer Daniel Fisher.
Fisher speculates the injunction may effectively end any possibility of a threshold change altogether, due to Donald Trump’s November victory for the presidency and the Republicans’ control of both houses of Congress. But the legal challenge remains active, so the final outcome remains uncertain.
Watch for further updates on ChurchLawAndTax.com.
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