If you were geared up to implement the new FLSA overtime rules on December 1, you certainly weren’t alone.  Human Resource managers and payroll firms were ready to implement changes based on the new  threshold for qualification of overtime pay, a move that would have affected millions of employees. In surprise pre-Thanksgiving surprise, a federal judge in Texas issued a national injunction.

The legal challenge was a response to a suit that had been filed by 21 states and multiple business groups.

See the New York Times article — Judge Suspends Rule Expanding Overtime for Millions of Workers – for a copy of the ruling. Noam Scheiber reports that, “…because undoing the regulation could have required a months- or years-long rule-making process similar to the one that produced it, the new overtime limit appeared likely to survive in some form.”

The big open question is what will happen to this rule under a new administration. Because the rule was issued as an executive order, it can be readily negated. On the other hand, it has been 12 years since there was any increase in the threshold so it is possible that the new administration may opt to make some change.

What should employers do next?

The change leaves many employers confused about what to do next. We’ve compiled a list or articles, advice and opinions from some trusted HR and employment law sources to help you in your decision-making.

In CFO magazine’s article Is Court Ruling on Overtime Regs the Last Word?, David McCann notes that while many companies may be cheering the judge’s decision, “thorny issues are in play, including the prospect of an appeal.”  With the deadline right around the corner, many employers had already implemented the changes. What’s the best course of action? McCann turns to labor attorney Bryan Stillwagon of Sherman & Howard, who offered this advice:

  • If you have already made changes in response to the DoL regulations, stay the course until there is greater clarity.
  • If you have already announced such changes but not implemented them, stay the course by implementing the changes.
  • If you have neither implemented nor announced changes, stay the course by doing nothing until there is greater clarity.

The Society of Human Resource Management (SHRM) offers two articles about the injunction that weigh options of how employers should handle the situation: Undoing Overtime Pay Changes Could Be Tricky and Overtime Rule Hang-Up Requires Careful Communication About Pay Decisions.

Bloomberg’s Daily Labor Report discusses the dilemma in its article Employers Wrestle with Whether to Cancel Overtime Rule Plans. The article discusses preliminary employer responses.

At Employment and Labor Insider, Robin Shea posts a client bulletin from her law firm: Court blocks DOL overtime rule: The fuller story

At Employment Law Matters, Maria Danaher examines the repercussions of the decision and offers advice for employers: Employers are not yet required to pay overtime in accordance with the revised FLSA regs . . . but proceed with caution

At Ohio Employer’s Law Blog, Jon Hyman discusses employer options in his post With the new overtime rules DOA, what now for employers?

Michael Haberman at Omega HR Solutions offers guidance to HR managers: The FLSA changes have been stopped, NOW WHAT?

Additional resources  

Business Insurance: Labor Department mulls legal options after overtime ruling

EBN: Should employers continue to prepare for overtime regulations?

ADP:  FLSA Overtime Rules Temporarily Blocked

SHRM: FLSA Overtime Rule Resources

 

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