Regulations & Compliance

The Plot Thickens on the Overtime Rule Changes

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Over six months of perspiration, preparation, and in some cases, implementation, have resulted in what we received on November 22nd : A preliminary injunction.

Ruling on a request for an emergency injunction, a federal court judge has granted the request thus halting the December 1, 2016, implementation to the Fair Labor Standards Overtime rules. This comes after several months of planning, preparation, and perhaps implementation of changes needed to comply with these rule changes involving reviewing compensation plans, analyzing the number of hours being worked, making changes to employees’ exempt status, adjusting rates of pay, reallocating job responsibilities, etc. The first important item to note is the fact this is a preliminary injunction. This means the rule change could still be implemented at a later date in either its original iteration or a revised version. The rule change has not been completely stopped.

• If you are an employer who had not yet implemented any of the changes you had been considering, you are certainly under no pressure to do so now. It is still prudent for you to keep those plans at-the-ready, however, as they may yet be needed.

• If you are an employer who has put changes into place, you will want to proceed cautiously.
For example:
o Where employees’ pay or total compensation has been increased above the new threshold, businesses will be most tempted to roll-back changes which they have already implemented. It is important, however, to consider the impact this will have on employee morale and consider other options. For example, these increases may remain in place with the communicated understanding it will be a consideration of future pay increases.
o Where employees have begun to use a formal time and attendance system to track hours for the purpose of pay, it may also be best to suspend or further delay this practice.

What is to come next and how quickly it will develop remains to be seen. In the meantime, you will be best served to be prepared to take action.

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