Washington - Q: I wrote you before about the change in
the Fair Labour Standards Act overtime regulations (June 26). To comply with
the rule, my employer informed me that my annual salary would be adjusted to
$24 above the new threshold, making me exempt from overtime pay. At the time, I
was disappointed because the raise was not that significant and I regularly
work more than 40 hours a week. However, I've begun feeling better about the
situation and am hoping my employer will not renege now that a federal judge
has put the rule temporarily on hold.
A: Thanks for the update. Looks like your employer was
doing the bare minimum to comply - but it counts. And if you're allowed to keep
your raise, you're still coming out ahead.
A recap for those who missed the news: Last spring, the
Department of Labour announced a major rule change to make most workers earning
less than $47 476 per year eligible for overtime as of December 1. In response,
some employers decided to raise wages to bring workers above the threshold (as
with the reader above) or turn exempt workers into hourly workers and pay
overtime as needed.
Then, just before Thanksgiving, a federal district court
blocked the rule with a temporary injunction. On December 1, the Labour
Department filed for an expedited appeal against the injunction - but even with
expedited review, the litigation is not likely to be resolved before the new
administration takes over on January 20.
Because the injunction came so late, many employers had
already implemented the rule and were left grappling with whether they should
undo the changes pending the outcome of the litigation.
Read also: Law is clear on holiday work and overtime
And to add to the uncertainty, the incoming
administration is not a fan of the change.
Although president-elect Trump hasn't indicated his
stance on the overtime rule, he has said small businesses should be exempt. His
Labour Secretary appointee, fast-food restaurant chief executive Andrew Puzder,
explicitly opposed the rule when it was announced, saying it would "add to
the extensive regulatory maze… on employers" and result in "reduced
opportunities, bonuses, benefits, perks and promotions."
So in its current form, the embattled rule seems to have
as much hope of survival as a New Year's resolution during Mardi Gras.
But the fact remains that the current overtime threshold,
which has been adjusted only once in four decades, has not kept pace with the
cost of living. Even a modest increase in overtime benefits would indicate that
the president-elect, who campaigned on bringing prosperity to "people who
work hard but don't have a voice," intends to keep that promise.
Thanks to Nancy
Hammer, Society for Human Resource Management, and Declan Leonard, Berenzweig
Leonard.