Overtime Rule’s Demise Has Employers Mulling Pay Raise Reversals

Businesses that took steps earlier this summer to comply with the Biden administration’s now-vacated overtime rule are left with a difficult choice: either cancel raises issued to keep employees overtime exempt or absorb the costs.

A Texas federal judge last week struck down a US Department of Labor rule that would have expanded overtime eligibility to four million new workers, finding that policy went beyond the agency’s authority. The ruling came just before its final implementation date of Jan. 1, but not before its initial phase on July 1.

Management-side attorneys say employers can legally lower salaries of workers who ...