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Halting of overtime rule puts employers in wait-and-see mode

On December 1, 2016 the Department of Labor's new overtime rule, which raised the wage threshold for workers who are exempt from overtime, was supposed to take effect. However, on November 22, 2016, the United States District Court for the Eastern District of Texas issued a nationwide injunction against the implementation of the rule.

Chicago attorney Alisa Arnoff says the injunction has created a tricky situation for some employers who are already complying with the rule. They risk serious morale problems if they change employee titles, exemption status, and/or compensation back to pre-rule levels. Those problems may be on top of morale problems caused when employers initially complied with the rule. Some employees may have been disappointed to lose overtime compensation by being given a raise in pay and presumably duties qualifying them as exempt. Others might have been disappointed that they are no longer exempt executive, administrative, or professional employees, and are now simply "hourly," regardless of the potential for overtime pay. Right now, employers are in a "wait and see" position, she notes. Read more about the injunction in the January Illinois Bar Journal.

Posted on January 18, 2017 by Mark S. Mathewson