I’m sure you recall the U.S. Department of Labor’s final rule on overtime that was set to go into effect on December 1, 2016, and would have affected millions of workers and employers across the nation.
The overtime rule caused quite a stir. As a result, it may have affected your facility’s former policies and procedures regarding work hours, overtime and job descriptions or your definitions of managers and other exempt employees.
As it was proposed, the Department of Labor’s rule would have defined exempt status for certain employee groups, including executive, administrative and professional employees as well as outside sales and computer employees. Many of those groups would be considered exempt based on salary rather than job description. For many of us that would have been a major departure from past employment practice.
At the time, it was clear to many the proposal meant the days of exempt status being determined by what employees did rather than by what they were paid, were coming to an end — even though in most circumstances exempt employees make more based on their roles and responsibilities.
Up to that time, exempt status also meant being salaried, while non-exempt meant being paid by the hour and eligible for overtime. The changes would have been far-reaching.
Lawsuits and injunctions follow overtime rule
The proposal, which was controversial from the start and became more so during the months leading up to the Department of Labor’s planned effective date, led to many concerns, worries, questions and heated discussions. Injunctions were filed and state lawsuits to block it were put forth.
Business leaders who knew they would be faced with either raising exempt employee salaries to avoid paying overtime or paying overtime to everyone, whether exempt or non-exempt — neither of which they wanted to do — filed lawsuits as well.
All the lawsuits were put into one single lawsuit in District Court in Texas that asked for a preliminary injunction to halt implementation of the Department of Labor proposal. The halt was granted in November, one month before the planned effective date, but it didn’t end there.
Interesting to note is after the Texas District Court judge issued his preliminary nationwide injunction for all employers to block the Department of Labor from implementing their new rule set to become effective in December, the Department of Justice on behalf of the Department of Labor, filed notice with the U.S. Circuit Court of Appeals in Texas to appeal the decision.
The Department of Labor said it would ask the Court of Appeals to “hold” the appeal indefinitely to give the department time to determine what the new exempt salary level threshold should be, while also allowing the department to continue to establish overtime regulations. The hold also would give the Department of Labor time to review the many concerns and comments they have received in relation to the proposal, as well as time to prepare a new proposal.
Opening briefs and corresponding responses were due by March 2017, but following repeated extensions of that March deadline, monitoring and reviews are said to continue.
What has changed since the overtime rule?
For most employers, it seems nothing much changed in 2017 or so far in 2018 in relation to the Department of Labor’s 2016 proposal, and it’s likely nothing will change until the department issues a new one. They have set the course of action they feel they need to take in response to last year’s injunction and it is under way.
They continue to review and update their job descriptions to ensure they will be able to meet one or more of the Fair Labor Standards Act’s “white collar duties” tests for executives, administrative personnel, professionals, and computer and outside sales personnel. Companies also continue to look at whether changes to these “white collar duties” tests are needed to make them more in sync with possible new exempt salary levels.
The Department of Labor meanwhile has been focusing its efforts on further rule-making and has issued another “request for information” that is asking the public for its input and guidance in creating potential new rules regarding exempt employees and overtime. They also are working on whether the standard salary level set in their rule effectively identified those employees who may be exempt, or if a different salary level would more appropriately identify them.
How has the overtime rule affected you?
As a recruiter or HR professional, how has all this affected your hiring practices or work and overtime policies? What has it all meant to your recruitment efforts and what do you predict the outcome will be?
Let us know what your facility has been doing in preparation for a possible new iteration of the Department of Labor proposal. You can email me at firstname.lastname@example.org.