Judge Delays Implementation of New Overtime Rules

Julie Janofsky appeared on MPT’s Business Connections on Monday November 21, 2016 along with host Jeff Salkin. The topic was on the December 1 start of the new white collar exempt employee regulations that were subsequently placed on hold due to a federal judge. The details are discussed in the 11/23/16 client alert and below.

Yesterday a federal judge in Texas issued a nationwide injunction, temporarily halting the implementation of the Department of Labor’s new overtime regulations, which were scheduled to take effect on December 1. The new regulations raised the minimum salary for exempt “white collar” workers to $913 per week, and required that white collar workers making less than $913 per week be paid overtime if they work more than 40 hours per week.

While the injunction is in place, employers do not have to comply with the new salary threshold requirement for their exempt white collar employees. However, please bear in mind that this injunction is only temporary. Upon further judicial review, the injunction may be made permanent, which would vacate the new regulations completely. Or the injunction may be lifted, allowing the regulations to take effect.

Many employers already have implemented changes to their payroll policies based on the new regulations. Some employers are still waiting. A cautious approach would be for employers to maintain accurate and complete records of the working time of any employees who might be affected by the change, beginning December 1. Employers would then have the information needed to audit and adjust the pay of such employees, should the injunction be lifted in the future.

Please bear in mind that employee working time includes any significant time spent outside of the workplace placing and receiving electronic communications and phone calls. In addition, office workers who are not employed in a bona fide executive, administrative or professional capacity usually must be paid overtime if they work over 40 hours per week, regardless of whether they are salaried.

We will continue to monitor this issue, and we remain available to answer any questions or concerns you may have.