New Overtime Rule May Not Survive Expected Court Challenge

Employment and litigation attorney Timothy Taylor was quoted in a recent Chicago Business Journal article about the U.S. Department of Labor's new overtime regulations. The updated policy raises the annual threshold under which non-exempt employees are eligible for overtime beginning July 1, 2024, and raises it further on Jan. 1, 2025. The non-exempt salary threshold would then be updated every three years based on current wage data. A previous attempt to raise the overtime salary threshold by the Obama Administration was overturned by a federal judge in 2017. Mr. Taylor said the new law will create compliance hurdles for businesses, possibly resulting in a reduction of the workforce and higher consumer prices, and will likely face a challenge in court.

“Legal challenges are likely because the rule includes the same features that were struck down in court last time: a salary threshold held to be divorced from the statutory exemption criteria, and an auto-update mechanism,” Mr. Taylor said.

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