On Tues., Nov. 22, 2016, a federal judge in Texas halted the Department of Labor’s (DOL) federal overtime rule, which was slated to go into effect on Dec. 1. The rule stated that the federal annual salary threshold would get bumped from $23,660 to $47,476.
Not surprisingly, the DOL appealed the federal judge’s decision on Dec. 1. This forces the case into the Fifth Circuit Court of Appeals, which most likely means there won’t be any action until the end of January, unless there is an expedited hearing or a motion for a stay. A motion for a stay would put the rule into effect immediately.
Avoid Quick Course Corrections
- Employers can hold off implementing payroll changes with their employees if they choose.
This is best done with employees that were switched to hourly pay from salaried or those employers who haven’t yet implemented the changes. Be aware that the DOL rule in its entirety or a new rule with a lower salary threshold may be enacted early next year. With the DOL appealing the block, there is a good chance a new rule will be pushed through.
- 2. Employers who have already implemented the rule in the workplace should seriously consider leaving the new rules in place.
If you have raised salaries to keep some of your employees exempt, it is recommended that you keep them at their new rate. There is no greater way to diminish morale than by taking back a raise. If you have employees that you switched to hourly, it is up to you whether or not you switch them back to salaried until the law is in effect.
- Stay abreast of the situation by keeping your eye on the latest developments.
Visit the United States Department of Labor (www.dol.gov) or the highly respected Society for Human Resource Management (www.shrm.org) for up-to-date information on the status of the law.