The late-breaking court order announced yesterday involving the DOL’s expansion of overtime eligibility is leaving businesses in limbo after months of preparation for the new rules. A federal judge in Texas issued the nationwide injunction this week, ruling that the Obama administration exceeded its authority in raising the overtime limit so significantly.
While business groups have lauded the ruling which suspends the December 1 rules from going into effect, the reality is that many companies have already taken significant steps to comply. Business owners, HR leaders and those responsible for workforce administration now need to weigh their options – and fast.
While the injunction may only be only a temporary measure and the future of the regulations remains unknown, the central question today becomes whether businesses should move forward with their plans or suspend them. The answer to that question is specific to each organization and the risks and rewards of each scenario. Some considerations that should be part of your conversation around next steps include:
- Are we changing the status of an employee because their responsibilities warrant non-exempt status? If so, you may want to move forward with the change.
- Are we changing the status and wage of an employee based on their current salary? If so, you may want to consider holding steady.
- How have we communicated these changes to our employees and what are the risks inherent in adjusting our plans?
- Will implementing the salary changes have a negative impact on employee morale?
Over the past several months, RKL has been providing guidance regarding the rules, and we’ll continue to help prepare clients for the impact of these recent developments. Have questions regarding the suspension of the new overtime rules? Contact me at dhoffer@rklcpa.com or 717.394.5666.
