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ABC, as a member of the Partnership to Protect Workplace Opportunity, called upon the U.S. Department of Labor’s Wage and Hour Division to stay the effective date of its final overtime rule to allow for judicial review, as there are currently several cases that could impact the validity of the new rule. The final rule is currently set to go into effect on July 1, 2024. Read the PPWO’s statement on the June 12 letter to the DOL.

 Postponing the effective date of a rulemaking while litigation is pending ensures that impacted businesses and the agency itself do not waste valuable resources by attempting to come into compliance or implement a rule that could be invalidated by a court,” the June 12 letter states. “For example, if the overtime rule is implemented, it will trigger significant costs for the employer community, but these costs can be avoided if a stay is granted by the Department of Labor and the courts eventually invalidate the rule.”

The letter further states, “Moreover, a stay of the overtime rule would also protect workers whose terms and conditions of employment may be negatively impacted by the policy changes within the rule. Many workers will be reclassified if the final rule goes into effect, resulting in them losing workplace status, access to benefits, flexible work arrangements, or career development opportunities. These changes should not be made lightly, as the resulting low employee morale and/or decrease in productivity cannot easily be recovered if the rule is eventually invalidated by the courts. When the Obama administration issued its final overtime regulation, the ensuing legal challenge resulted in the rule being struck down only a week before it went into effect. By then many employers had already adjusted employees’ statuses and were unable to undo those changes.”

On April 23, the DOL issued its final rule on overtime, which will change overtime regulations under the Fair Labor Standards Act. The final rule increases the minimum annual salary level threshold for exemption in two phases: from the current level of $35,568 to $43,888 on July 1, 2024, and to $58,656 on Jan. 1, 2025. In addition, the threshold for highly compensated employees will be increased from the current threshold of $107,432 to $132,964 on July 1, 2024, and then to $151,164 on Jan. 1, 2025. Further, salary thresholds will update every three years starting on July 1, 2027. Learn more about the final rule and read ABC’s press release opposing it.