November 23, 2016 — A federal judge for the U.S. District Court for the Eastern District of Texas has issued a nationwide preliminary injunction on the Department of Labor’s new overtime rules, which were slated to go into effect on December 1, 2016. The judge ruled that the Department of Labor (DOL) likely overstepped its rule-making authority by raising the salary threshold as high as it did and by implementing the automatic increase every three years.
What this means now:
- The effective date of the rules has been delayed indefinitely.
- Employers may choose not to implement the changes they had planned for Dec. 1 compliance.
- The new rules have not been thrown out or invalidated – at least not yet.
Employers are obviously wondering whether they should move forward with the changes they have been planning. Unfortunately, this is a difficult question to answer and ultimately a business decision, which is much harder than a compliance decision. Although employers are not required to make changes, they may want to consider the following:
- Will it hurt the bottom line to make the changes? If so, how much?
- Will it be difficult to undo changes that have already been made?
- How will employees feel about the decision? Did they like the changes? Hate the changes?
- Is the new pay structure better than what is in place now?
- If the changes aren’t implemented now, will it be possible to make them on short notice in the future?