- For many area businesses, the first expansion of federal
overtime rules since 2004 meant pay raises for some employees, as
well as various changes to company policies.
affected businesses worked tirelessly to alter their pay structure
and policies to abide by the new law, which was passed in May by
the federal Department of Labor and would have expanded overtime
eligibility for millions of Americans when it was slated to go
into effect Dec. 1.
a ruling Nov. 22 by U.S. District Judge Amos Mazzant put the
overtime law on hold and sent some companies scrambling to pick up
the pieces. Mazzant’s ruling sided with the 21 states and groups
that opted to file motions opposing the changes.
have) been working and creating their plan for compliance since
May,” said Laurie Greenlees, human resource business
advisor/manager for Milwaukee- based MRA. “For some employers,
that included increasing salaries for employees and for other
employers, that meant changing their status to nonexempt and
oftentimes converting their pay from a salary basis to an hourly
is a nonprofit trade association that serves over 4,000 employers
more than 800,000 employees. With constant communication with
those businesses, the organization has heard from many of its
members with concerns about the overtime expansion law.
the proposed law does
and when initiated, the new overtime law would give salaried
employees making less than $47,476 a year overtime pay when they
work more than 40 hours a week. Currently, only workers who make
up to $23,660 a year qualify for overtime pay.
are exceptions to the law, however, and some businesses and
employees could be exempt if they meet specific criteria, MRA
Human Resource Government Affairs Director Kathryn Helmke said.
have to be paid on a salary basis, meaning your salary has to be
consistently paid to you regardless of the number of hours you
work,” she said. “Finally, you have to meet the salary
threshold and you have to meet the exempt duties test ...
they’re called white collar exemptions.”
said a number of member employers are disappointed with the
convoluted situation that’s resulted, mostly because of the
very frustrated,” Greenlees said. “This injunction was made
eight days before the effective date and really many employers
were closed over Thanksgiving, so it’s really giving them four
business days to re-evaluate their plan.”
said many businesses in the area had already made policy changes
that went into effect in early November, thinking the law would
move forward as described. But with an injunction filed, companies
are left with important decisions to make on whether they want to
backtrack on pay raises or status changes that had been handed out
and revert to the former policy, or continue to move forward as
creates a very sensitive issue for employers,” Greenlees said.
“Because when you’re talking about changing someone’s pay,
benefits and status, it has a large impact
on employee morale.”
as Helmke said, the Department of Labor filed an appeal with the
U.S. Court of Appeals for the Fifth Circuit in New Orleans on
Thursday, meaning the timeline for the new law to be enacted
continues to be in question. Typically, a review will be had with
time allotted for attorneys on both
sides to voice their case. Helmke said some people estimate it’s
“very likely that a decision wouldn’t be forthcoming till
January or perhaps even after the new administration takes
the delay may give President-elect Donald Trump a chance to have a
say about the law.