Dive Brief:
- SHRM told congressional leaders that they should either rescind or revise the overtime ruling at a Feb. 16 hearing. It testified before the U.S. House Committee on Education and the Workforce's Subcommittee on Workforce Protections in a forum on Federal Wage and Hour Policies in the 21st Century Economy.
- SHRM and other organizations called on the Trump administration to act on compliance issues under the Fair Labor Standards Act that have plagued HR departments and small businesses for decades. To update and modernize FLSA rules on overtime, the U.S. Department of Labor under the Obama administration nearly doubled the eligibility threshold from $26,330 to $47,476 a year.
- An injunction from a Texas federal district court has temporarily blocked the overtime rule, which would have become effective on Dec. 1, 2016.
Dive Insight:
The FLSA overtime rule dates back to 1940, with few updates in place since. Employers generally agree that updating these mandates was long overdue. With technological advances and more flexible ways of working, the old rules don’t fully account for the needs of today’s workforce.
But the rule doubles the eligibility threshold, making many more employees eligible for overtime pay. And at 1.5 times each worker’s hourly rate for every hour worked beyond a 40-hour week, the payout can be prohibitive for small employers and nonprofit organizations.
Considering the upheaval with DOL leadership being most recently resolved, little update has been made over the rule since the original injunction. Many predictions currently hold that the rule likely won't survive President Trump's first term, though the fate of this rule has so far defied most predictions.
