Overtime Law Update - What the Court Ruling Means for Employers, says The Growth Company, Inc.'s CEO, Dr. Lynne Curry, SPHR and Senior Associate, Richard Birdsall, J.D.

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Many employers made adjustments to meet the new Overtime Rule deadline of December 1st. Now the federal court has put the rules on hold.

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Most are aware that a federal court ruling has temporarily put the federal Department of Labor (DOL)’s Fair Labor Standards Act (FLSA) rules on hold.

These rules raise the minimum salary threshold required to qualify for exempt status to $47,476 per year, or $913 per week, essentially doubling the minimum salary threshold. This ruling would have changed the payroll landscape for many employers and employees.

The rules were set to take effect on December 1, 2016, and many employers had made changes in anticipation of the new regulations. A number of states believe the DOL exceeded its legislative authority in promulgating the regulations and sued to block the new rules. Speculation is that President-elect Donald Trump’s DOL will not support them.

What does the court ruling mean?

The federal court issued a preliminary injunction, which effectively preserves the status quo until the court can resolve the issues the states’ lawsuits raised. According to the court, putting the new rule on hold until the court sorts through the issues raised would be less harmful than letting the new regulation to go into effect and then potentially reversing it.

Although the current DOL reports that it will fight the litigation, the President-elect may reverse the regulations and/or instruct the DOL to stop fighting the lawsuit. Alternatively, the new Congress could attempt to revoke the rules with legislation.

What actions should employers take?

Employers don’t have to raise their minimum exemption salary thresholds until the court rules in favor of the proposed rule – which it may not do. Employers who want to make the changes outlined by the DOL’s proposed rule can if they wish, but the old rules still apply.

As an employer that may have already made the adjustments, revoking or postponing the planned changes have pros and cons.

To stay posted on the most recent updates, follow The Growth Company on LinkedIn, Facebook, and Twitter or Workplace Coach Blog.

About The Growth Company, Inc.

The Growth Company, Inc. (TGC), an Alaska based management-consulting firm, provides customized programs and assistance in the areas human resources, training, and organizational strategy to over 4,000 organizations worldwide.

With a mission to improve the workplace one organization at a time, The Growth Company, Inc. was founded in 1978 by Dr. Lynne Curry. Now, TGC’s consultant team offers over 110 years of combined expertise and human resources professionals including Senior Associates who are SPHR certified (Senior Professional in Human Resources) in the areas of human resources, strategic planning, training, investigations and mediation.

Currently, TGC is among one of the select few Alaska based consulting firms that provides remote consultation via live webinar, and is an approved HRCI (HR Certification Institute) accredited training firm in Alaska. For more information about The Growth Company, Inc. or Lynne Curry and Richard Birdsall, please visit: https://www.thegrowthcompany.com/

Veronica Jackson
Director of Marketing & Business Development at The Growth Company, Inc.

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Caitlin Remmer

Veronica Jackson
The Growth Company, Inc.
since: 12/2011
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