As you may know, the final Fair Labor Standards Act’s (FLSA’s) overtime rule was set to go into effect Thursday, December 1. A federal judge in Texas put the brakes on the Department of Labor’s (DOL’s) new federal overtime rule, which would have doubled the FLSA’s salary threshold for exemption from overtime pay and would have automatically adjusted the threshold every three years beginning in 2020.
The court’s decision on Tuesday, November 22, 2016 was welcome news for some employers who have been struggling with the impacts of the rule—both to their budgets as well as its impact on workplace flexibility and employee morale.
What do you do now?
- At this time, employers do not need to implement changes by the December 1, 2016 deadline. After hearing the full case, the court could allow the rule to go forward; the incoming Trump Administration now has more time to make changes, including ending the rulemaking permanently or issuing a new rule with a different salary threshold.
- If you have already implemented the rule, consider leaving your decisions in place. We empathize with you and employers who have already prepared for the December 1 deadline. Each workplace is unique and employers must consider which approach causes the least disruption for their workplaces. For example, if you have not already reclassified employees, you may want to postpone your decision and monitor the policy developments closely. On the other hand, if you raised otherwise exempt employees’ salaries to meet the proposed threshold, you may want to keep those in place.
Over the coming weeks, more information and policy developments in this area will arise. For up-to-date articles, analysis and public policy updates on the FLSA, we recommend you visit shrm.org.