Just as staffing firms around the country were adjusting their policies to comply with the federal overtime rule, a decision made by a federal court on Nov. 22 brought things to an abrupt halt. A Texas judge made the decision that blocked the Department of Labor (DOL) from implementing and enforcing the rule, scheduled to take effect on Dec. 1, 2016, and now the proposed changes are postponed indefinitely. [more]
What would have gone into effect Dec. 1?
The overtime rule would have raised the salary threshold for employees exempt from overtime pay from $455/week ($23,660 a year) to $970/week ($50,440 a year). The rule was expected to impact millions of workers, making them eligible for time and a half pay for every hour worked over the typical 40-hour work week.
The future of the overtime rule
The future of the overtime rule remains in a state of uncertainty, especially with the recent election of President-elect Trump. It is now in question whether the overtime rule will be implemented at all, and even if it does go into effect, there is no indication of what the effective date might be.
With the decision now in the appeals process, there are a few potential outcomes to consider. It is possible that the appellate court could rule to reverse the injunction and allow the overtime rule to be implemented, but it is not likely that a decision will be made prior to President-elect Trump taking office. If the court does not rule on the appeal prior to Donald Trump’s inauguration, it is possible that the future president could direct the DOL to withdraw their appeal and develop new overtime regulations. Or if the federal court rules on the motion for summary judgment, the overtime rule could go away completely.
Best practices for staffing firms
It is difficult to predict exactly what will happen with the overtime rule, but at any time the injunction could be reversed and the rule could go into effect. While the news of the overtime injunction might cause you to breathe a sigh of relief, we recommend you continue with business as usual and closely monitor coming developments. Although the rule has been temporarily blocked, there is no firm decision suggesting the rule will not eventually resurface, and when it does, you don’t want to find your staffing firm out of compliance.
Learn more about the recent overtime injunction at Paychex.com, and check back here for news and updates.
If you would like to discuss ways to prepare for potential overtime outcomes, please reach out to talk to a member of our team.