Only 10 days prior to the December 1, 2016 effective date of the new rules relating to payment of employee overtime (see preceding article), a federal judge has issued an injunction barring implementation of the rule. For employers who had not yet taken steps to prepare for the rule change, the Texas court’s ruling may be greeted with a big sigh of relief. For those who have already made salary and/or other adjustments in anticipation of the new rule, the decision may elicit frustration. For everyone, including those within the Department of Labor, confusion rules the day.
Ultimately, all employers should understand that we have yet to hear the last of this misadventure. While it presently appears unlikely that the rules change will be implemented in its previous form, indications remain that some change (perhaps less ambitious than previously proposed) will be implemented. For now, employers are advised to consider taking a “wait and see” approach. Unless easily reversed, employers who have made significant changes in anticipation of the rules change may be best served by staying the course. Issues ranging from employee morale to the administrative costs and concerns of effectively untangling complex wage and hour knots would seem to militate against pursuing a yo-yo approach to the unknowns that lie ahead.
Stay tuned for the next chapter in this high-stakes saga. In the meantime, should you have any questions regarding how these new events may impact your business, feel free to contact Brown Jacobson’s Employment Practices Group for further information.