On Tuesday a judge issued a country-wide injunction stalling the overtime final rule we all expected to come into play next Thursday. Annoying, right? It’s not that it was a bad decision, because the rule is likely to be challenged under a Trump presidency, but that those organizations that have been diligently planning for the new rule saw their whole applecart upset — again. It’s difficult to say how long it would take the Trump team to push out a new final rule, or if they would even move to do so. All we can do, as with so many things post-election, is wait and see.
Here is your Friday Five:
Federal Judge Issues Nationwide Injunction Putting Overtime-Pay Regulation on Hold and Overtime Rule Overruled
Confused? Don’t worry, WSJ has all the facts of why the rule was overturned and who challenged. This is a just-the-facts report on the ruling that will help you get your footing on this issue. HRE, meanwhile, has all the opinions on the case that you need. Was the Department of Labour overreaching? No wait, maybe it was the court? And what about the economy? The experts weigh in, in the HRE piece.
So the overtime rule isn’t coming anymore. Fine. That doesn’t mean you shouldn’t continue to study how effectively your company is doing compensation and overtime. Use the stalled final rule to think closely about how you categorize employees, track overtime (yes you should be doing it for exempt employees, even if it’s not a requirement) and fair compensation.
Although it seems like a certainty that the Trump team and the Republican dominated Congress will kill the overtime rule for good, Daniel Fisher from Forbes argues that the court might reinstate it. While U.S. District Judge Amos L. Mazzant struck the law down, his ruling “included conflicting statements in his ruling that the government might exploit to gain the rule a reprieve.” In other words, the overtime rule could still be amended and reinstated.
Of course, no one is losing eligibility for overtime because the new rule had yet to take effect — but employees who have been looking forward to the change won’t feel that way. Over at CNN Money, Jeanne Sahadi says that one of the biggest problems facing employers now is the how to handle the fallout from the rule being overturned. Many employees will be angry and it will be difficult to offer any reassurance since things are still so uncertain.
Many businesses have already made changes — how do they roll those back? In many cases, businesses will have to do a partial rollback of policies as some will be do complex or already so ingrained as to be impossible to quickly change. This last minute ruling creates a a serious problem for businesses that were ahead of the curve on getting ready for the rule to come into effect — but it’s a balm for small businesses, who were almost uniformly unhappy with the overtime rule. So what’s next? Like the rest of us HR Dive doesn’t quite know what’s coming, but they remind us that the overtime rule, whatever its flaws, was the first update to the law in 20 years. Some kind of new overtime rule is still necessary.