New Overtime Law is Blocked
The new overtime law that would have increased pay for millions of employees starting on December 1 has been blocked by a preliminary injunction issued by a Texas federal court. The law would have raised the minimum salary hourly threshold exemption for white collar employees under the Fair Labor Standards Act from $23,660 to $47,476. Since this occurred in a federal court, the injunction applies to the entire country. A preliminary injunction however, is not a final determination by the Court. All this means is that the Court wants to look into this matter further and that for now, the status quo will remain in effect. From an employer’s perspective, this means that no changes need to take place on December 1 and employers can follow the existing overtime rules. Please click here for our May 2016 blog post that discussed the impact the new overtime law would have had on your business.
Employer Overtime Considerations
While this clearly is a positive result for employers from a cash flow perspective, it places employers in difficult situations if they have already told their salaried employees how the new rule would have affected them. Recognizing that an employer no longer has to comply with the new overtime law, consideration needs to focus on more than just what is legally required. Care needs to be given to employee morale. Employees who were told that they would be getting a raise are not going to be happy to learn that it is being pulled out from underneath them. If an employer does elect not to go forward, care needs to be given so that employers do not create claims by angered employees. It is unfortunate but in this case, employers who were not prepared for the new overtime law are the employers who have dodged a bullet and it is the proactive employers who are left dealing with the messy consequences.
Regardless of what category you as an employer fall into, we still believe it a best practice to review the duties your employees are actually doing compared to their title and make sure you comply with current FLSA requirements. If you do this, you will be in a better position to comply with whatever changes are ultimately approved by the Department of Labor.
As we stated in our earlier post on this topic, please remember the minimum wage under the FSLA is only a floor and states are free to set their own minimum wages as they see fit. The current minimum wage in Pennsylvania at the time this article was posted is $7.25 per hour and in New Jersey it is $8.38 per hour.
Douglas Leavitt is an attorney with Danziger Shapiro & Leavitt and focuses his practice on guiding business with their daily operational needs. Please feel free to contact him or any of the other attorneys at Danziger Shapiro & Leavitt to discuss how this new change will affect your business or any other issue you may have that concerns you and your business.
This entry is presented for informational purposes only and does not constitute legal advice.