Federal judge blocks overtime rule

If there’s anything we have learned from the year 2016, it is that this was not the year to be a betting man or woman. That is, of course, unless you like betting dangerously against the odds.

From the Brexit decision to the U.S. presidential election to even the Cubs winning the World Series, it has been a year of surprises for experts. Now we can add the overtime rule from the Department of Labor to that list.

On Nov. 22, U.S. District Judge Amos. L Mazzant III sided with the plaintiffs in the lawsuit to block the overtime rule. The rule was set to take effect on Dec. 1.

This doesn’t mean the rule is completely dead in the water, as this ruling simply blocks the implementation from taking place on Dec. 1. However, with Republicans controlling both houses of Congress and the Trump administration set to take office in January, its future is not certain.

What does this mean for business owners? Well, if you waited until now to make a decision about how to deal with nonexempt employees or you told your employees what the plan was “pending the results of the lawsuit,” you’re off the hook – nothing changes.

However, if you planned ahead and either told your employees that they would be receiving overtime pay or a raise, I would strongly caution against taking that away. That is a recipe for losing good employees; even if the federal judge made the ruling, it is still you taking away a carrot. If you’ve made the promise you better keep it, or your employees will view you as dishonest. It may be expensive, but it is also expensive in dollars and time to try to replace employees who leave.

If you made decisions that negatively affect your employees – such as moving them to hourly and reducing their hours – it is possible that reversing your decision could be seen as a positive: “The government was making us do this, but now that we don’t have to, we won’t.” However, if the rule does eventually pass at a later date, you’ll have to flip-flop once again. I would weigh those positives and negatives and make a decision that is best for your business and your employees.

As for the rule? We’ll have to keep an eye on the Department of Labor and the decisions made by the new legislative and executive branches in 2017. It could be blocked indefinitely, or it could be implemented at a later date, possibly with a lower threshold. And if it is, you will need to be ready.