There continues to be much confusion following the injunction handed down by a federal district court judge in Texas to put the brakes on the Department of Labor’s (DOL’s) proposed overtime extension rule – just 10 days before the regulation was set to go into effect. And while the regulation isn’t quite DOA, employers across the country are still left to grapple with the uncertainty of what the future holds, until a judge issues a final ruling.
The new rule, which was set to take effect on Dec. 1, would have more than doubled the overtime exemption threshold currently in existence; and would have forced employers to make hard choices with regard to their employee’s wages. They could either increase employee salaries above the new $47,476 threshold, limit the hours employees could work or begin paying overtime when applicable. Instead, many employers opted for a forth option – joining forces with 21 states and the U.S. Chamber of Commerce in an effort to stop the new rule from taking effect. Critics of the rule claim that the excessive increase of the overtime threshold limit and automatic adjustments went far beyond the DOL’s authority.
The Road Ahead
There appears to be agreement among those in the human resources sector that while many employers were breathing a little easier after learning of the injunction, they are far from being completely off the hook.
“There’s a consensus that the overtime threshold will eventually be increased, even if not as fast, or by as much as the DOL rule changes would have put in place,” stated Lisa Nagele-Piazza, SHRM-SCP, J.D., in a recent article on the Society for Human Resource Management’s website.
Moving forward, business owners should consider taking a good, hard look at their existing scheduling practices to determine how many overtime hours are being regularly logged and why. Then consider what solutions may be available to help employees complete their job responsibilities within the allotted 40-hour work week.
Perhaps by taking a new perspective to managing your employee’s work schedules, you can identify more effective and efficient ways to utilize your workforce while minimizing overtime costs. Doing so will not only help strengthen your bottom line today, your efforts will continue to protect your company’s revenue when the next overtime exemption threshold proposal is announced.
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By Renee West, SHRM-CP, PHR (New Philadelphia office)
Expand Your Understanding Of The Overtime Exemption Threshold
Want to learn more about the overtime exemption rule and get tips to help you prepare for future DOL legislation that could impact the wages businesses pay their employees? Check out this recent episode of unsuitable on Rea Radio for more valuable insight.