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Waiting on the Overtime Rule Changes

Office employees

Since around December 1st, 2016, employers and employees have been waiting to find out about whether or not there will be a change in the overtime threshold. The DOL’s new rule was put on hold just 10 days before the rule was scheduled to go into effect.  While the rule has sat in limbo, employers have been left unsure of exactly what they should be doing. Many salaried employees had already been switched over to hourly status or given a raise in preparation for the new law. What businesses were supposed to do in the interim was largely unknown – switch them back to salaried, revoke the raises?

In short, this whole thing has been a terrible mess for everyone, but some clarity may finally be on the way.

After the federal district court in Texas put an injunction on the rule on November 22nd, 2016, the DOL appealed to the 5th Circuit Court of Appeals and has since gotten an extension on that appeal until May 1st, 2017. What happens from there is still unknown but things will get moving once the DOL has a new Secretary of Labor.

Two Possible Paths From Here

  1. If the DOL decides to drop the appeal, the AFL-CIO wants to defend it.
  2. Tammy McCutchen, former administrator of the DOL’s wage and hour division under President George W. Bush and currently part of President Trump’s transition team, would like to, “restart and redo the overtime regulation, setting the salary threshold at about $35,000, where I think it should be.”

The Secretary of Labor nominee, Alexander Acosta, who was approved by the Senate Committee today, said that once he is confirmed, the DOL will decide whether to continue on with the appeal or nullify the rule and start over. Acosta thinks the threshold should be set around $33,000.

For more information on Tammy McCutchen’s conversation with SHRM, see the SHRM website.

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