New overtime rules in limbo after federal injunction

A little more than a week before a major change to the U.S. overtime rules took effect, a federal judge put a halt to those plans. Last week, Judge Amos L. Mazzant III issued an injunction against the new overtime rules, thus at least putting them temporarily on hold.

The new overtime guidelines, which were set to take effect this Thursday, December 1, would have expanded overtime eligibility for more than four million workers, per U.S. Department of Labor estimates. Under the new rules, many workers making $913 or less on weekly basis ($47,476 per year) would have now been eligible to draw overtime. For now, though, overtime eligibility remains limited to non-exempt workers making $455 or less per week, or $23,660 per year.

The new overtime rules were published by the Department of Labor in May, leaving companies about six months to get ready for the new requirements. The new guidelines were likely to most impact companies with hourly workers, as well as non-exempt workers who were making more than $455 per week but less than $913 per week. (Airline employees, taxicab drivers, federal criminal investigators and railroad employees are among those who are exempt from overtime-pay rules, per Department of Labor guidelines.)

One firm, JLP CPAs in suburban Cleveland, reacted to the new overtime rules by taking “everybody that was salary that made less than the 47,500 per year — the new figure — and we put them on a straight hourly rate, which, for some, was a substantial pay increase because some of the employees were averaging working 45 to 50 hours a week,” said Paul Pahoresky, a partner with the firm, in an interview with NPR’s Weekend Edition Saturday.

As with this example, the timing of the injunction may have left firms to make policy changes only to have the status quo remain in place. The question now is whether the proposed overtime rules changes are indeed enacted, albeit later than expected.

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