It’s late. Really late. And your employees are still finishing up their duties for the day. Are you required to pay them overtime?
Good question. Remember back in 2016 when the Department of Labor (DOL) announced updates to the Fair Labor Standards Act (FLSA) overtime provisions? These changes would have nearly doubled the salary threshold to $47,476 from $23,660.
And then in November of last year, several business groups and 21 states sued the DOL and a federal judge issued an injunction preventing the DOL from enforcing the overtime rule that was set to take effect Dec. 1, 2016. Many employers had likely already adjusted certain policies and procedures to comply but have been met with uncertainty since.
Request for Information
On February 24, 2017, the White House issued Executive Order 13777, “Enforcing the Regulatory Reform Agenda.” That order tasks federal agencies to identify regulations for repeal, replacement or modification. Consistent with that order, the DOL replied to the injunction, opting to not advocate for the salary level set in the 2016 Final Rule and on July 26, 2017, issued a Request for Information (RFI) of 60 days in order to obtain public comment on the salary level and standard duties tests. These comments will assist the DOL in developing a new proposed rule.
Also in July, a class-action lawsuit was filed against Chipotle Mexican Grill alleging that the fast food restaurant chain failed to pay some employees for overtime under the 2016 final rule. The plaintiffs in the lawsuit argue that Chipotle should be required to pay overtime despite the injunction because the injunction doesn’t apply to private employers and the rule remains in effect until the court issues its final ruling (remember that all that has happened is that the DOL has been enjoined, or prevented, by the judge from enforcing the 2016 final rule).
Even if the plaintiffs win the lawsuit, the DOL may roll back the 2016 final rule if and when it issues a new proposed rule this fall, leaving the plaintiffs without any claims.
So despite the uncertainty, you still have to comply for the time being. PrimePay will keep you posted as we learn any news.
What are your thoughts? Did you like the new overtime thresholds set for overtime?
Disclaimer: Please note that this is not all inclusive. Our guidance is designed only to give general information on the issues actually covered. It is not intended to be a comprehensive summary of all laws which may be applicable to your situation, treat exhaustively the subjects covered, provide legal advice, or render a legal opinion. Consult your own legal advisor regarding specific application of the information to your own plan.