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.

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