Risk Management

Next Steps After Overtime Rule Freeze

/ December 2, 2016 December 2, 2016


As many are already aware, a Texas federal court judge, Amos L. Mazzant, III, has issued a preliminary injunction, delaying the DOL’s changes to the FLSA overtime exemption rule. While many may welcome the news, the reality is that it creates a huge mess for employers.

It’s important to note that the injunction did not kill the rule changes. It simply halted them from becoming effective on December 1, the original compliance deadline.

This indefinite delay has certainly put employers between a rock and a hard place : Do they revert back to their previous pay practices and act like all the prep work they’ve done up to this point was all for naught — only to possibly have to move forward with their compliance plans in a few months if the DOL successfully defends its position on the rule? That would require a lot of delicate conversations with employees.

Or do employers move forward with their compliance plans as if the injunction/delay was never issued? That could result in having to shell out a lot more overtime than the FLSA would require.

Those are questions employers will have to address on their own; however, companies are not alone when making these tough choices.

Hank Johnson, CEO of the Society of Human Resource Management, recently wrote an article providing recommendations on behalf of the organization as to what employers should do next:

Because the rule did not take effect today, SHRM suggests that employers continue to follow existing overtime regulations. Organizations that have already reclassified positions or raised salaries may want to leave these decisions in place. This is the company’s call, however, since each workplace is unique—but the goal should be to take whatever actions make the most sense for your workplace.

At Exude, we have been standing shoulder-to-shoulder with our clients at every stage of the regulatory process. We invite you to stay connected through our blog and Compliance Newsletters for breaking information and policy developments, as well as expert advice regarding this FLSA ruling.