By Mark Iezza
The final Fair Labor Standards Act’s (FLSA’s) overtime rule was set to go into effect Thursday, December 1. A federal judge in Texas put the brakes on the Department of Labor’s (DOL’s) new federal overtime rule, which would have doubled the FLSA’s salary threshold for exemption from overtime pay and would have automatically adjusted the threshold every three years beginning in 2020. Prior to the announcement, many employers have been struggling with the impacts of the rule—both to their budgets as well as its impact on workplace flexibility and employee morale.
Employers do not need to implement changes by the December 1, 2016 deadline, but this could quickly change. The DOL will likely appeal so be on the lookout for an opinion from a court of appeal or even the Supreme Court. After hearing the full case, the court could allow the rule to go forward; the incoming Trump Administration now has more time to make changes, including ending the rulemaking permanently or issuing a new rule with a more revised salary threshold. If you have already implemented the rule, consider leaving your decisions in place. Each workplace is unique and employers must consider which approach causes the least disruption for their workplaces. For example, if you have not already reclassified employees, you may want to postpone your decision and monitor the policy developments closely. On the other hand, if you raised otherwise exempt employees’ salaries to meet the proposed threshold, you may want to keep those in place.