Last year, the Department of Labor (DOL) set forth a new “Final Rule” on overtime requirements that gave millions of Americans the right to time-and-a-half overtime pay. The law in place for years gave automatic overtime rights to non-exempt individuals who earned $455 per week ($23,660 annually). The new rule approximately doubled this threshold to $913 per week and was set to go into effect December 1, 2016.
On November 22, 2016, a judge in a Texas federal district court issued a preliminary injunction on the overtime rule, which halted it from taking effect. The DOL initially sought an expedited appeal of the matter and all of the briefs in the appeal of the injunction were to have been filed by January 31st. However, the litigation is on-going so what will happen to the law is still very much uncertain.
The change of administration only complicates the matter further, as the Trump administration opposes the rule. In reality, the new leadership of the DOL could drop the appeal and simply let the injunction remain permanently. Having an experienced employment lawyer who is up-to-date with these laws can help you understand the rules and mold your business accordingly.
Effects on Businesses
The confusion surrounding the Final Rule has cost business owners significant time and money over the past several months. Because the injunction came so close to the effective date of the law, many businesses had already taken the necessary measures to prepare to comply with the new guidelines. In many situations, this included switching hourly employees to salaried and setting their salaries just above the threshold. Once the rule was stayed, many employers kept these salaries in place, resulting in lower profits.
In addition, there may be another complication for employers with higher-paid employees. The new overtime rule included a provision that applied to highly compensated employees (HCEs). Generally, a non-exempt worker would no longer be entitled to overtime if they made $100,000 per year. The new rule raised that threshold to $134,004. When the court issued the injunction, it did state that it barred the “overtime rule”. In general, however, it went on to specifically address the minimum pay threshold and not the HCE threshold. This has left some experts wondering if that part of the rule may still take effect, though there are dissenting opinions on this matter.
Call a San Jose Business Attorney for Questions about Employment Matters
If you have concerns about the new overtime rule or regarding any other labor or employment matter, don’t hesitate to contact the skilled employment lawyers at Structure Law Group, LLP. We can assist you in coming into compliance with all employment laws and can help to resolve any disputes that may arise. Call our office at 408-441-7500 or fill out our online contact form to schedule your appointment with a San Jose business attorney today.