What Are the Options for Employers Regarding Overtime Now?

The overtime law that was supposed to go into effect on December 1, 2016, has been preliminarily enjoined. What does that mean for employers and their employees now?

As you may have heard by now, the U.S. Department of Labor’s overtime rule that was supposed to be taken into effect December 1, 2016, was preliminarily enjoined (temporarily blocked) by the U.S. District Court Judge Amos Mazzant III. This injunction applies nationwide, but the judge’s decision is not final, the DOL appealed yesterday.

While politicians play with the policy, what does this mean for real employees and employers? The decision puts many workers and employers in limbo. So when it comes to overtime, what are the options for employers?

Q: If an employer chooses not to change this because of the temporary block, then Judge Mazzant’s order is reversed on appeal, would this put the employer at risk?

It could put all employers who did not change their overtime policies at risk because the FLSA litigation could state that the initial injunction was invalid from the very beginning and it did, in fact, become effective on December 1, 2016. This could lead to a lawsuit filed against the employer for not changing the policies during that time period.

Q: What are most employers doing?

Employers are lumping into three groups: those that already put their change into place, those that announced the change to their employees, and those that are not taking any action.

Most employers who executed their changes are sticking with those changes and waiting to see what the courts decide. They are uncomfortable with the idea of repealing those changes based on a preliminary injunction, and feared it could have affected the workplace morale.

Those that communicated it to their employees will likely wait to see until it becomes more certain what will happen in the future.

And those that have done nothing will most likely wait until the final ruling is given. Running the risk of a retroactive lawsuit.

When it comes to overtime, you need to know this information, even if you are a nonprofit organization. Contact the experts at Colorado Nonprofit Insurance Agency, part of HUB International in Denver, Colorado at 303-894-0298. We will work with you to ensure you are getting the most out of your coverage.