On November 7, 2024, the Partnership to Protect Workplace Opportunity (PPWO) issued a formal request to the U.S. Department of Labor’s Wage and Hour Division (WHD) to delay the upcoming implementation of the second phase of its new overtime rule. In a letter addressed to WHD Administrator Jessica Looman, the Coalition expressed concern that enforcing the rule amid ongoing legal challenges could create significant financial and administrative burdens for employers across the nation.
The rule, titled “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees,” raises the minimum salary threshold for overtime eligibility. The first increase took effect in July, with the second phase scheduled for January 1, 2025, which would bring the threshold to over $58,000 per year. This increase represents a 65% jump in the minimum salary threshold within a year, a change the PPWO contends is not only costly but also disruptive for employers who may need to make extensive adjustments to payroll, employee classifications, and benefits.
Currently, three federal cases are challenging the legality of the new overtime rule. In one notable case, the District Court for the Eastern District of Texas has already issued a limited preliminary injunction, temporarily blocking the rule’s application to Texas state employees, indicating the court found merit in the arguments against the rule.
With the outcome of these cases still uncertain, it would be prudent to delay implementation until May 1, 2025, under 5 U.S. Code § 705. The requested delay would allow employers time to adapt should the rule be upheld, while also conserving resources for WHD, which would otherwise be allocated to educating and enforcing the changes.
