FLSA OVERTIME RULE UPDATE: What employers need to know right now
What’s going on with the delayed FLSA overtime rule changes put on hold six months ago?
It’s been three months since our last update on what has happened since the U.S. District Court in Texas handed down a last-minute injunction of the landmark 2016 Department of Labor (DOL) overtime rule changes. These changes were set to go into effect on December 1, 2016, but the court blockage prevented the implementation of the new Fair Labor Standards Act (FLSA) rule that would have given an estimated 4 million more American workers eligibility for overtime pay.
So where do things stand now?
A quick overtime-rule-change recap
As we reported late last year, the injunction put many employers in a very difficult situation. Many businesses had spent months preparing for the rule that extended the right to overtime pay to a huge number of lower-wage, white-collar workers. Employers were forced to spend their Thanksgiving holiday weekend scrambling to figure out what to tell their employees just days before the regulation was set to take effect. It was not fun.
To all those organizations had already revised employee contracts ahead of the deadline, changed their management structures and told salaried workers they would need to be paid on an hourly basis, the DOL said it was considering legal options to deal with the injunction. The rule was technically put on hold, and employers were encouraged to stay up to date on information, in case the regulation was put back into motion, Tina Hamilton, PHR, president and CEO of myHR Partner, told The Morning Call in a report on the situation when it unfolded back in November.
So, what’s up with the legislation now?
As of this month, lots! Here’s a rundown of some insightful articles from around the web that can help you prepare for what lies ahead in overtime rule legislation:
- From The Washington Post: A GOP-backed bill called the Working Families Flexibility Act, recently passed in the U.S. House of Representatives. It would allow employers to offer employees paid time off instead of time-and-a-half wages when they put in overtime. Employees would have to agree to accept the paid time off instead in lieu of overtime pay. These workers would get an hour-and-a-half of comp time for each hour of overtime worked.
- From HR Morning: In April, the DOL asked for another 60 days to file its brief on the rule that was put on hold by a Texas judge’s injunction. This is the third time the agency has asked for an extension. This last motion specifically cites the fact that the then-nominee for Secretary of Labor Alexander Acosta was not yet confirmed at the time as a reason for the delay. Acosta has indicated in the recent past that he feels there are problems with the FLSA’s salary threshold under the old overtime rules, which hadn’t been updated since 2004. However, he also indicated that doubling the amount would put a stress on the system and might also overstep the DOL’s legal authority.
- CNN Money has a good synopsis of what employers need to know about what to expect from proposed and delayed legislation in the weeks and months ahead.
- The Society for Human Resources Management (SHRM) has an excellent overview of the Working Families Flexibility Act, and what it will mean for employers and employees.
One thing is certain about all this: it has gotten really hard to predict what will become of overtime pay regulation. Rest assured, however, that we will keep you posted on any developments that employers need to know. That’s why if you haven’t already done so, consider following us on Twitter, LinkedIn or Facebook. We will make sure you stay informed on this and other important compliance issues.
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A comprehensive examination of your organization’s overtime situation is essential. You need to know what exactly to do now that the new DOL rulings have been blocked, and keep up to date on any further developments. Our overtime compliance services are thorough, targeted and done by experienced and knowledgeable HR experts. We offer support on how best to manage compliance in a way that makes sense right now, and in the long run. And we can help you communicate with your workforce as you work through these latest developments.