Nov
30
2016

On Nov. 22, a federal judge issued a preliminary injunction to stop the implementation of U.S. Department of Labor’s Fair Labor Standards Act (FLSA) overtime rule. This FLSA change would have significantly increased the threshold for overtime exemption pay from $23,660 to $47,476.

The injunction means that changes are no longer effective Dec. 1, 2016. The injunction is temporary, but could become permanent, although it’s also possible that the rule could be changed and other standards put into place.

For now, employers who have not made changes will have more time to decide what kind of restructuring they want to do. Employers who have already made changes will have to decide whether to keep those changes—but should consider carefully what effect further changes will have to employee morale or whether they will constitute a contract breach.

It’s important to note that the injunction is temporary, so it doesn’t mean that employers can stop worrying about what to do.

Debbie Hill, CVPM, SPHR, SHRM-SCP, and hospital administrator for four hospitals, said, “We cannot believe that any change will not affect us. The delay has simply bought us time to decide whether to move salaried employees to hourly and pay the overtime involved or plan for wage increases.”

Whether the rule goes through as originally written or is adjusted, there are steps employers can take to improve their practices.

“Many practices have no process in place to track hours worked for salaried workers,” Hill said. “This will be a vital piece in determining changes once the final minimum salary level is settled.”

Read more about the ruling at the Society for Human Resource Management website.

Photo credit: © iStock/PeopleImages, jasastyle

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