News Releases
December 1, 2016
From Society for Human Resources Management

Overtime Rule Hang-Up Requires Careful Communication About Pay Decisions

by Allen Smith, J.D.

If employers have announced employee raises or eligibility for overtime pay because of the Department of Labor's (DOL's) revised overtime rule, they may need to honor those commitments. Communications about the impact of a court's decision to temporarily block implementation of the overtime rule should honor any contracts created in prior messages about the rule. 

The overtime rule was originally scheduled to take effect Dec. 1 and would have raised the exempt salary threshold from $23,660 to $47,476. Employers were left with the choice of raising the salary of employees within the range of the old and new thresholds to $47,476 or reclassifying them as nonexempt. But after a judge on Nov. 22 barred the rule from taking effect, employers aren't sure what to do. 

Jim Swartz, an attorney with Polsinelli in Atlanta, recommended that if employers have not actually made changes in response to the overtime rule, they "can simply inform affected employees that the injunction has caused uncertainty in the law and the employer will re-evaluate whether changes should be made, and if so, when.”

But "if employers decide to undo already-implemented changes, they should emphasize the advantages of the original compensation method," Swartz said. "For example, they should emphasize the flexibility that exempt status affords and the benefits that come with exempt status. Of course, an employer's messaging will depend on the number of impacted employees and the company's internal assessment of employees' reaction to the back-and-forth changes."

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