Overtime Rules Suspended

Companies have spent many hours and much money instituting new policies to be in line with new overtime rules that were expected to take effect on Dec. 1. Those rules double the threshold for overtime pay and make salaried workers eligible for automatic time-and-a-half compensation when they work more than 40 hours a week and make less than $47,476 annually. Employers may not average hours over a two-week pay period.

For now, though, the ruling is suspended. And if Republicans in Congress have their way, it will never take effect.

So what happened? A federal judge in Texas, appointed by President Obama, determined the U.S. Department of Labor had overstepped its authority. Twenty-one attorneys general and numerous trade associations sought relief from the proposed rule. Read more here at the New York Times.

The judge "found that by raising the salary threshold too high and mandating automatic adjustments to the threshold every three years, the Department of Labor surpassed its authority," says attorney Gregg Frame of Taylor McCormack & Frame, a law firm based in Maine.

Clark Insurance in Manchester, which has provided employer educational sessions on this, suggests that should some or all of the proposed rules be implemented, employers take caution. They recommend employers conduct a thorough training with all employees regarding wage and hour rules. This rule may create a cultural shift in your workplace that means clear and frequent communication to minimize conflicts.

Finally, Clark Insurance has encouraged employers to be sure their Employment Practices Liability insurance includes an endorsement for legal defense costs for wage and hour claims. Be mindful that the endorsement does not cover settlement costs nor will it pay attorneys' fees if it is determined that the employer intentionally violated the law.  

Regardless of the court case, Republicans also have their eye on overturning the overtime law, so the entire issue may be short lived. A ruling allows Congress to repeal regulations approved by the previous chief executive within 60 legislative days and counting legislative days means the mid-May final rules meet the criteria to be overturned.

Read more about it here at slate.com.