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What Could the New Overtime Rule Mean for Your Business?

April 4th, 2017
What Could the New Overtime Rule Mean for Your Business

Last year, it seemed as if a new overtime rule would go into effect on December 1st that would expand overtime rates to millions of employees throughout the United States. The federal Department of Labor (DOL) sought to amend the Fair Labor Standards Act (FLSA) to increase the threshold for automatic overtime rights from $455 per week to $913 per week. Employees earning less than $913 per week would be automatically qualified to receive time-and-a-half payments for any overtime hours worked, regardless of their job duties.

Many business owners were understandably concerned about the effect such a change would have on their bottom line, as well as the necessary steps to be in compliance with such a drastic change. However, 21 states joined together to file a lawsuit to stop the rule, claiming the DOL did not have the power to enact and enforce a rule of this caliber, that the rule is in violation of the Tenth Amendment, and that the DOL did not follow proper procedures to amend FLSA. In November, just before the anticipated effective date, a federal judge halted the rule from going into effect.

Unfortunately, many businesses had already taken steps to change their payroll or their wages for certain employees to prepare for the new rule and minimize the damage it may cause for their business. Now, owners are left in limbo – wondering whether they should keep waiting in case the new rule eventually takes effect or whether they should (or even can) return to their previous terms of employment.

While no one knows the fate of the new rule, the change in administration makes it less likely that the new overtime rule will survive. It is not even known whether the administration will keep defending the new rule in subsequent appellate proceedings. We will have to wait and see.

In the meantime, the best step for any business owner to take is to discuss their current situation with an experienced business attorney. We can review your circumstances, ensure you are in compliance with all current federal and state laws, and keep you informed of new developments in employment and wage laws.

Call 732 238-8686 today for more information.

At the law office of Bowne Barry & Barry, we stay informed about business and employment laws so that your focus can remain on running a successful company. If you have questions or need any type of legal assistance for your business, please contact us today to learn more about how we can help.