Now that the Department of Labor’s (DOL) overtime rule changes have been put on hold, what should employers do? That, in part, depends on the steps your company took to prepare.
In May 2016, the federal DOL released final changes to the overtime regulations. With this final rule, the DOL sought to update the salary level required for exemption. These changes were to be effective on December 1, 2016. But, just a week before the December 1, 2016, effective date, the U.S. District Court for the Eastern District of Texas issued an emergency injunction, stopping the DOL from enforcing the long-awaited changes to the federal overtime rules on a nationwide basis.
This means that until further action from the courts, Congress, or the new administration, the minimum salary threshold for the white-collar exemptions will remain where it has been since 2004, at $455 a week. The salary threshold for the highly compensated employee exemption will remain at $100,000 per year.
Right now, from a legal standpoint, it’s business as usual—it’s as if the final rules never existed. If, however, you have already made changes to employees’ pay or classification status in anticipation of December 1st—it’s a different story. While there is nothing legally wrong with rolling back changes you have already made, this could prove problematic from an employee relations perspective.
Here are some options and pros and cons to think about as you consider your next steps in dealing with employees who fall between the $455 and $913 per week salary level.
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Susan E. Prince, J.D., M.S.L., is a Legal Editor for BLR’s human resources and employment law publications. Ms. Prince has over 15 years of experience as an attorney and writer in the field of human resources and has published numerous articles on a variety of human resources and employment topics, including compensation, benefits, workers’ compensation, discrimination, work/life issues, termination, and military leave. Ms. Prince also served as an expert on several audio conferences discussing the 2004 changes to the federal regulations under the Fair Labor Standards Act. Before starting her career in publishing, Ms. Prince practiced law for several years in the insurance industry and served as president of a retail sales business. Ms. Prince received her law degree from Vermont Law School.
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