top down Icon

FLSA Overtime Rule: On Hold & Uncertain Future

Posted on Thursday, December 29, 2016

Time & Attendance Software: FLSA Overtime Rule On Hold | Time Rack

The US District Court has blocked the new FLSA overtime rule that was set to go into effect this year.

Because this affects up to 4.2 million white collar employees and thousands of employers, here's what you need to know as an employer about where we go from here.

What Is the FLSA?

FLSA stands for the Fair Labor Standards Act, which is a federal law that establishes minimum wage, overtime pay eligibility, record keeping, and child labor standards affecting full-time and part-time workers in the private sector and in federal, state, and local governments.

The FLSA includes an overtime exemption for white collar employees that earn a salary of more than $455 per week or $23,660 per year. The new FLSA overtime rule proposed by the Obama administration would've raised the white collar overtime exemption threshold to $913 per week or $47,476 per year. Thus, anyone earning less than $913 per week would be due overtime pay if they work more than 40 hours per week.

Is the Overtime Rule Dead?

While the nationwide injunction issued is a preliminary one, the Department of Labor (DOL) has appealed the district court's injunction of the agency's new overtime rule. The DOL has also asked for the appeals process to be expedited and it's unclear if it will happen before the new administration takes office.

There’s also a lawsuit against the new overtime rule by 21 states and the US Chamber of Commerce.

Even if the US Court of Appeals grants the DOL's motion for an expedited appeal, the process is unlikely be completed until after the next administration has taken office.

Thus, it seems unlikely that the next administration and new DOL staffers will pursue this or similar measures. However, individual states like California and New York may act on their own.

As a result, there is nothing that employers are required to do now or in the near future regarding overtime changes. We will continue to monitor the situation and recommend taking a wait-and-see approach to see what happens in the courts, at the federal level and with the states.

If You've Made Changes...

You are currently under no legal obligation to reverse any changes made in anticipation of the new FLSA overtime rule being implemented.

However, if you do roll back changes that are no longer required by FLSA, you'll want to consider the impact of doing so on your affected employees as well as any costs involved to do so. Any overtime wages paid as part of changes made in anticipation of the rule cannot be recouped.

Contact us to learn more about the FLSA overtime rule's uncertain future