The Fair Labor Standards Act (FLSA) overtime pay changes going into effect Dec. 1, previously covered in the Sept. 13 CompliancePop blog, are on hold.

The U.S. District Court for Eastern Texas placed a nationwide hold on the new salary threshold of $47,476 for the FLSA overtime exemption, which postpones the rule’s implementation. This means that the Dec. 1 deadline is no longer effective, and the current salary threshold of $23,660 remains in place — for now.

The court has not indicated when it may issue a final ruling in this case. In addition, there are other factors that might come into play, such as an appeal of the court’s decision by the U.S. Department of Labor and the stance President-elect Trump’s administration might take toward wage and hour issues.

So this may leave you asking, “Do I need to change anything now that the rule has been put on hold?” And the answer depends on how far you’ve progressed in your compliance efforts with the new salary threshold.

Changes Already Made

First, if you’ve already made changes, you’re not required to change back to the old way of doing things, according to the Society for Human Resource Management (SHRM). For example, if you’ve reclassified employees as nonexempt or increased salaries to meet the new threshold, this does not violate the current rules, and you’re not legally obligated to go back to how you treated these employees previously.

And before you decide to reverse any compliance actions you’ve already taken, you should consider the effect it might have on employee morale and administrative costs, SHRM says. If these expenses outweigh potential savings, then you should contemplate leaving the recent changes in place.

At the same time, if you’ve made changes and decide to reverse them, SHRM points out that you cannot demand that employees repay wages that they have already earned at a higher pay rate.

Changes in the Works

If you haven’t modified anything to comply with the overtime rule changes, you might want to wait and see what the court’s final ruling is before moving forward, SHRM notes. However, you shouldn’t take the court’s action as an indication that the injunction is permanent. There is just no way to know, for now.

Some practices, however, may be implementing these changes for other reasons:

• Some states — such as New York and California — have pending laws that increase the state salary exemption threshold. (Check with your state’s labor department to determine if you fall into this category.)
• To address FLSA exempt misclassification issues or merit increases.

If this is the case, then you might choose to move forward with you plans, SHRM says.

Regardless of where you stand in complying with the previously announced FLSA overtime pay changes, SHRM recommends clearly communicating your decision with your employees and how it will affect them. You may even want to designate a representative from Human Resources to answer questions and ensure a consistent message, the organization added.

As this issue develops, we’ll keep you updated so that you can make informed decisions regarding your employees and your practice, and ensure your compliance.