Ohio State reverses hundreds of workers’ raises after DOL’s overtime rule overturned

Posted by News Room 3 December 2024

Dive Brief:

  • The Ohio State University is rolling back raises to 306 workers whose salaries were adjusted following the U.S. Department of Labor’s expanded overtime rule, a university spokesperson confirmed to HR Dive. The rule, which was recently overturned, had raised the minimum wage threshold for overtime under the Fair Labor Standards Act to $43,888 on July 1 and would have raised it to $58,656 on Jan. 1, 2025. The news was first reported by The Columbus Dispatch.
  • The university had made salary adjustments totaling about $2 million after the rule’s passage but is walking them back after a Texas federal judge ruled last month “the 2024 Rule exceeds the Department’s authority and is unlawful.” That ruling effectively reset the threshold at which workers qualified for overtime to $35,568.
  • “In alignment with the court ruling, employees receiving increased pay in November and December will revert to their original salary in January,” the university said in an emailed statement. “All employees remain eligible for annual merit increases, salary adjustments based on market rate, and promotion.” Ohio State employs more than 50,000 people.

Dive Insight:

Attorneys have previously told HR Dive employers should proceed with caution when considering making changes to worker salaries after the overtime rule was vacated. 

While DOL has appealed the ruling, the 2024 overtime rule is likely dead, the attorneys said. But still, employers that made classification or wage changes to comply with the July threshold adjustment should think twice before reversing wages or reclassifications, Chuck McDonald, co-chair of wage and hour practice at Ogletree Deakins, and Brett Coburn, partner at Alston & Bird, told HR Dive.

Doing so could have a negative impact on employee relations, McDonald said, or open up a company to litigation, Coburn said. Such workers “may not be comfortably exempt from a duties perspective” and reclassifying them a second time could potentially prompt them to talk to a lawyer, Coburn said. “You may, by trying to save a little bit, be inviting litigation.”

However, the attorneys said any unannounced plans companies had to adjust workers’ classifications or salaries to comply with the previously anticipated — but now defunct — January 2025 rule change could be shelved.