Is the ‘New’ Overtime Rule Actually Rising From the Dead?

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It’s officially October. It seems as though everywhere we turn, we’re bombarded by advertisements for pumpkin spice lattes, Halloween pop-up stores, and the ninth season of AMC’s “The Walking Dead.”

And speaking of zombies, the Fair Labor Standards Act (FLSA) overtime rule — the one that was initially proposed by the Obama administration back in May of 2016 — has been resurrected from the dead once again. Earlier this year, the Department of Labor (DOL) announced their intentions to propose a new plan to change overtime regulations at the beginning of 2019. In fact, they’ve spent the month of September hosting public listening sessions in an attempt to gather views on the proposed overtime rule changes.

Will this zombie regulation finally gain some traction? Let’s recap.

 

The idea of a new overtime salary threshold is born

In early 2016, the Obama administration announced big changes to the existing overtime rule — a rule that had not been altered since its inception in 2004. The proposal would up the overtime salary threshold from $23,000 to $47,476 — effectively giving millions of salaried employees the chance to earn overtime pay. Employers were given until December 1, 2016, to make the changes necessary to comply with the new rule.

 

A federal judge shoots the new ruling down

On November 22, 2016, a federal judge in Texas stopped the new overtime rule in its tracks. While some businesses owners (those who had yet to make payroll changes) heaved a big sigh of relief, others (those who had already offered employee raises and implemented the required record-keeping systems) faced a moral dilemma — should they roll back the changes they’d already made?

 

The new ruling rises again

Employment experts encouraged business owners to stay the course. “The new overtime rule might still happen … someday,” they said. “It’s better to prepare now.” And, in July 2017, the DOL backed up that claim. They announced that a new overtime rule was still weighing heavily on their minds, and they had big plans to revisit the proposal. Business owners everywhere waited with bated breath for an official ruling.

 

The same federal judge perfects his aim, and the new ruling takes a blow

One month later, the new overtime rule was shot down once again by the same Texas federal judge. He said he stood by his decision to block the new rule — claiming that the Department of Labor had overstepped its authority. After this final blow, business owners and employees alike began to believe this piece of legislation was actually (finally) dead and buried.

 

The new ruling rises again … again

But this zombie of a ruling can’t be stopped.

In October 2017 (on Halloween, no less), the Department of Labor challenged the judge’s decision. Rumors of a new proposed salary threshold of $33,000 begin to swirl, and employers prepared to make compliance changes once again.

Then, in April of this year, the DOL announced their intentions to propose new plans for overtime regulations at the start of 2019 — just a few months from now. Recently, they’ve been gathering views and ideas from participants through public listening sessions.

In other words, yes, the zombie overtime ruling has been resurrected once again — and this time, it just might stick.

As always, it’s incredibly important for business owners to have the necessary time tracking systems and reporting processes in place to comply with the new overtime rule — whenever it takes effect. After all, overtime violations are among the most expensive and most common FLSA violations (costing U.S. businesses over $1.7 billion since 1984 and accounting for 83 percent of money recovered from FLSA lawsuits). This zombie rule has one nasty bite.

 

Learn more about the current and future state of wage and hour laws

Join attorneys Maria O. Hart, Caroline Brown, and Dr. Chester Hanvey for an hour-long discussion surrounding the world of wage and hour laws. Hear the latest developments at the state and federal levels and find out how this zombie ruling could affect YOU.

2 Comments

  1. Jack Williams says:

    The rule needs to set the minimum salary to at least $45,000 a year. Employers are taking advantage of their employees and forcing them to work more then 40 hours a week. I work for Coca Cola and my salary is under $40,000 and I work between 50 and 60 hours a week. How is that fair? It’s time that laws were created to protect employees and not just benifit big business. Keep my salary where it is and just pay me overtime. I don’t mind working but I expect to get paid for all the time I do work. Is that now fair?

  2. Margaret says:

    I work in Retail as a salaried manager, always have to put in 50 to 60 hours a week minimum. The overtime rule should be in affect for Salaried minimum wage employees at the original 47476 as submitted the first time… Employers have gotten away with paying salaried employees way to long less then the min. hourly wage if the hours worked per week is computed hours worked/vs: salary pay… Employers should be made to pay the salary minimum wage at 47476 at the very least. They can afford to pay their Salaried employees the wages they earn and deserve. If any bunisnees say that cant afford this Small or Large Business then they need to find out what they are doing wrong in their business to afford this or shut down or work the hours themselves for less then minimum wage. the DOL is correct in trying to have this change stick. It has been over three decades or longer since this was visited and I have worked as a Salaried manager for longer then that, and earn every penny and then some for the Employer. Invest in your people who make your wages, stick to doing the right thing.

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