Federal overtime rules to go into effect have been put on hold. Recently I wrote a blog about the change for minimum wage to be paid to employees in order for them to be exempt from overtime which was to take effect on December 1. This blog can be found at https://affordablebookkeepingandpayroll.com/federal-overtime…california-wages/
On November 22, the required change was put on hold by a federal judge in Texas who granted a preliminary injunction against the ruling. The new law would have increased the federal standard for salaried employees to $47,476 a year (up from $23,660) in order to not be paid overtime for any hours worked over 40 in a week. This ruling is not permanent, it is only to allow time for the judge to hear arguments and make a decision on if this ruling should go into effect or not.
If the judge makes a ruling that the overtime rate does not need to be increased, the case can be taken to an appellate court which could theoretically reverse the judge’s decision. If the ruling for increased minimum pay to be exempt from overtime is upheld long term, it will be interesting to see if it will go into effect retroactively to December 1, 2016, or from the time the decision is rendered.
If employers must comply with the law retroactively, it may be difficult for employers to meet the requirements if documentation is not in order. So it is a good idea to track how many hours employees are working even if on salary in the event this law goes into effect retroactively. Failing to do so could result in a litigation by employees who state they were not properly paid overtime wages. It will be up to the employer to prove their case that an employee did not work more than 40 hours per week (remember that some states are more stringent and pay overtime for more than 8 hours worked in a day).
Protect yourself against future litigation by keeping accurate employment records for hours worked by any employee in order to properly pay overtime in the event this rule does go into effect and you must retroactively pay employees for overtime hours.
We’ll share information in another blog when a decision on this ruling has been made.
