Judge Halts DOL Overtime Regulations

Yes, you read the title correctly.  After 5:00 p.m. on the Tuesday before Thanksgiving, a federal judge in Texas issued an order granting a preliminary injunction that will prevent the DOL overtime regulations from going into effect on 12/1/2016 as everyone has planned.  The preliminary injunction is just that, preliminary.  However, getting a permanent ruling will take time.  Many commentators agree that it will likely take until well into a Trump Administration, which means that the rule may never take effect.

So, what do you do now?  If you have read my prior blogs, you’ve likely conducted time surveys, evaluated your current classifications, and perhaps even determined that some of your employees are incorrectly classified by law or for the efficiency of your business.

First, don’t panic.  But do STOP any notifications you were planning for employees now.  Take a breath and re-evaluate what changes you still want to make and when.

Second, if you have realized that you have employees misclassified under the law or based on efficiencies, you can still explain to the employees that based on your time studies, you made decisions about the best way to have people classified and you are still going to make some changes.  This can be done now as planned, or at the first of the year along with other changes – perhaps in policies or handbooks.

Third, if you have already told employees they are getting a raise, I encourage you to read the blog I posted this morning before this ruling about making changes in an unregulated workforce here:  https://www.mwblawyers.com/employmentblog/gratitude-and-uncertainty/ .  Taking back a raise can have significant effects on morale and retention.  However, if the change must be made, it needs to be communicated in an environment of trust and with an explanation of the reasons.  It also must be communicated 24 hours prior to the change and in writing.

Fourth, employees who meet the duties test, but not the salary test, and were becoming hourly will likely be happy to go back to being exempt without complaint.

Fifth, many clients have told me in the last 2.5 hours that they have made the changes they needed to make and will simply stick with them.  So perhaps this exercise of preparation helped employers make necessary changes in pay structure after all.

I encourage all of you to refrain from holding meetings you haven’t had yet and to consult with counsel prior to making any rash decisions.  You now have a chance to take more time to determine the best changes to make.

Happy Thanksgiving again…it’s been quite a day!

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