As you may know, the federal Department of Labor (“DOL”), adopted new regulations for overtime pay that were to be effective December 1, 2016. Those regulations included a significant increase in salary for any employees whose duties qualified them for an exemption from overtime pay as either a professional, executive or administrative employee under the Fair labor Standards Act (FLSA).
On November 22, 2016, a federal district court judge temporarily delayed the December 1, 2016, effective date of the DOL regulations. Twenty-two states and the U.S. Chamber of Commerce brought a lawsuit claiming the DOL exceeded its authority with the new regulations. The federal judge agreed to postpone the effective date until parties can argue the case more thoroughly. There will be future action in the courts on this issue.
What does this mean for employers today?
- If you have prepared plans to comply with the regulations, we recommend you NOT throw away those plans or spend the budgeted money elsewhere yet. The federal courts may change course.
- If you have already informed employees their duties or pay will change, we encourage caution in rescinding those promises. Your employees may have already made plans relying upon your promises. However, you can rethink any future raises or future increases in benefits. There may be other payment options that avoid the new salary yet provide value to your employees.