Wood Words

Overtime Rule on Hold: What Should Middle TN Employers Do? (part 1 of 2)

A federal district court judge in Texas has issued a nationwide injunction which effectively blocked the Department of Labor’s (DOL’s) new overtime rule (slated to go into effect on December 1, 2016).

If the rule had been enacted, it would have:

  • More than doubled the Fair Labor Standards Act’s (FLSA’s) annual salary threshold for exemption from overtime pay (from $23,660 to $47,476).
  • Extended overtime protections to 4.2 million workers who are not currently eligible under federal law.
  • Required employers to pay overtime to workers who do not earn at lease $47,476 ($913/week) – even if they’re classified as a manager or professionals.
  • Increased the salary threshold every three years. Based on current projections, the DOL’s salary threshold is expected to rise to more than $51,000 with its first update on January 1, 2020.

So now what?

Now that the preliminary injunction has delayed the December 1st deadline, employers may continue to follow the existing overtime regulations. The injunction, however, is only temporary. A federal judge will be reviewing the case to determine whether the injunction should be made permanent. While we do not have a definitive date for this judge’s final decision, it could be rendered within a month or so.

If your organization has already implemented changes to comply with the new overtime rule, consult with your attorney to determine if it makes more sense to roll back those changes or to leave them in place. In addition to considering financial factors, you should also weigh the impact reversing changes could have on employee morale.

FLSA Overtime Rule Resources

The Society for Human Resource Management (SHRM) has assembled a number of resources HR professionals can use to learn more about the FLSA overtime exemption rule. This article contains important information about both the existing and new FLSA overtime rules, as well as links to additional articles on the topic.

Ready to take control of your overtime costs?

The right staffing partner can help eliminate overtime (and the compliance headaches it causes) by supplementing your core team with flexible access to qualified temporary employees. Want to learn more? Our Nashville employment experts are just a call or click away.

Disclaimer: The information included in this post is not intended to take the place of legal counsel. Employers with questions regarding overtime compliance should seek the advice of a qualified attorney.