In case you haven’t noticed, Dec. 1 has come and gone and the Department of Labor’s Overtime Rule has yet to be implemented. Why? Because on Nov. 22 a Texas judge granted an Emergency Motion for Preliminary Injunction, which prevented the DOL from putting the final ruling into effect.
The DOL’s Overtime Rule was supposed to update standard salary levels, provide a method to keep salary levels current, strengthen overtime protections for salaried workers who are already entitled to overtime and, ultimately, provide clarity for workers and employers. The ruling, which was finalized in May, was welcomed by consumer advocates and union groups, but many business groups and 21 states felt differently.
These business groups and states challenged the ruling by arguing that the DOL does not have the authority to require employers to offer overtime to workers who earn below a certain amount. If ever put into effect, these regulations would impact employers in many ways. First and foremost, they will affect labor costs and cause employers to restructure their workforces. Following the final ruling in May, many employers began preparing to comply with the new rule.
So, now what? The injunction gives the court time to thoroughly examine the regulations and come to a final decision, but what does it mean for employers?
Until a final ruling is reached, employers may continue to follow the existing overtime rule and postpone any salary increases or employee reclassifications. However, if employers have already restructured their workforces, it’s probably best to leave those changes in place to avoid further confusion. Ultimately, the overtime rule may still be implemented down the road, so employers should continue to be aware of how the ruling may affect their businesses and employees.
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