Wage disputes are a common source of conflict between employers and the workers they hire. There are many state and federal laws that regulate wage practices, including minimum wage and overtime laws.
Employees sometimes file lawsuits against companies when they believe that their employers have not followed wage regulations. Overtime claims are among the most common wage and hour complaints brought in civil court. If employees believe they have a right to overtime pay and do not receive it, they may try to sue as a way of connecting with those wages.
A few months ago, an announcement about a pending change to federal overtime regulations made major ripples in the business world. However, a federal judge recently struck down the new rule before its complete implementation. The result may be that workers who thought they had grounds for a wage claim do not.
What was the proposed rule change?
One of the ways companies avoid overtime wage obligations is by paying workers on a salary basis. Many salaried employees are exempt from overtime wage rules. The company does not have to pay them extra even if they work 50 or 60 hours in a single week. However, the worker has to earn a minimum salary to be exempt.
Since 2019, the threshold for exempt salaries has been $35,568. The proposed rule change increased the minimum salary threshold to $43,888 as of July 1st, 2024. A second increase was scheduled for the first of the year, at which point a salary would have had to be at least $58,656 for the worker to be exempt.
However, a federal court judge ruled in November that the new rules were an overreach and were therefore not enforceable. The threshold for an exempt salary has officially reverted to the level established in 2019. Only workers paid less than $35,568 may have grounds for an overtime wage claim based on insufficient salary.
As employment laws change, both workers and businesses need to stay updated about the evolving employment landscape. Companies trying to avoid statutory violations and workers concerned about employer practices may need help evaluating a situation. Those who seek out proper guidance and accurate information may be able to better protect themselves from financial and legal hardship.
