What Businesses Should Do Now That the Overtime Pay Rule Is on Hold

Daily Herald (Arlington Heights, IL), December 3, 2016 | Go to article overview

What Businesses Should Do Now That the Overtime Pay Rule Is on Hold


Byline: Larry Ryan lryan@mbfinancial.com

The implementation of a Department of Labor rule that would have roughly doubled the number of Americans eligible for overtime pay is now on hold.

Just before Thanksgiving, Judge Amos L. Mazzant III of the U.S. District Court for the Eastern District of Texas issued a nationwide injunction against the rule, indefinitely pushing back its Dec. 1, 2016, effective date.

The DOL rule, released in May, would have made 4.2 million white-collar workers newly eligible for overtime benefits. It raised the Fair Labor Standards Act's salary threshold from $23,660 to $47,476 for salaried employees to automatically qualify for time-and-a-half overtime pay when working more than 40 hours per week.

In Oct. 21 states challenged the rule in a lawsuit, filing an emergency motion for a preliminary injunction to stop the rule's implementation. They claimed that the DOL had exceeded its authority by raising the salary threshold so significantly and by providing for automatic adjustments to the threshold every three years. The U.S. Chamber of Commerce and 50 other business groups also raised concerns about the ruling's implementation and filed another lawsuit, which was consolidated with that of the states.

In suspending implementation of the overtime rule, the judge said that the federal law governing overtime does not allow the DOL to decide which workers are eligible based on salary levels alone. The DOL will likely challenge the judge's decision, saying that it "remained confident in the legality of all aspects of the rule" and was considering its legal options.

What does this mean for businesses and employees?

With the injunction issued just 10 days before the ruling's proposed implementation, businesses of every size across the country were already gearing up to comply.

But, what should business owners do now?

The Society of Human Resources Management shared the following recommendations for businesses while the overtime rule is being reviewed:

* Follow existing overtime regulations. …

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