A federal judge’s decision to block the Department of Labor’s new overtime regulation from going into effect Dec. 1 adds a new headache for employers already grappling with how to comply with the rule: Should they roll back changes that have already been put in place, such as awarding raises or converting salaried workers to hourly wages to better track their time? Should they hold off on implementing new policies that have already been announced but weren’t set to go into effect until next week?
The overtime regulation, which would have made more than 4 million additional workers eligible to earn extra pay when they work more than 40 hours a week, doubles the salary cap at which workers are exempt from making overtime pay. Currently, salaried exempt workers who earn as little as $23,660 are not eligible for overtime and therefore are paid the same wages regardless if they worked 40 hours a week or 80. The new regulation would double that salary cap to $47,476 a year.
In light of the injunction, Boston employment lawyer John McKelway is advising clients when possible to hold off on implementing changes. But employers may have already adjusted their payroll practices — introducing new time sheets or changing workers being reclassified as hourly to a biweekly pay schedule, as required by state law.
“I’m already getting e-mails from clients who are alarmed about this,” he said. “The damage that can be done in a situation like this, where it looks like the employer is lurching back and forth and the employees are the ones constantly getting squeezed by this, that can create huge morale problems in the workplace.”