DEALING WITH WAGE STRUCTURES AFTER THE DOL’S NEW OVERTIME RULE WAS TEMPORARILY BLOCKED: STOP… GO… PROCEED WITH CAUTION!

stop-light

Just weighing in on the latest development surrounding the DOL’s Overtime Ruling and the temporary injunction that occurred on December 22, 2016…

The aftermath of the recent halting of the DOL’s New Overtime Rule has left many employers baffled of how to proceed. I would suggest to proceed with extreme caution to not kill morale and momentum as we move ahead to 2017. As an employer, you have options…stay still or rewind, if you already made the necessary changes to be compliant with the now blocked DOL’s December 1st implementation of the New Overtime Rule.

Here are some options to consider:

Employers could stay still and wait on further direction while the temporary injunction is in place or rewind pay structures that were in place prior to the ruling. In either case, employers should weigh their options and do what’s best for their individual business and industry. If you can, find out what others in your industry are doing so you do not damage your edge to retain your talent.

If employers had a significant number of exempt employees scheduled to be reclassified as nonexempt and therefore eligible for overtime under the new rule prior to the blocked regulations, they may want to “roll back” their changes to save increased wages due to overtime payments until a final decision takes but should check their employees’ morale levels. This option may work best for smaller companies where the employer-employee relationship is more intimate and personal conversations on what has taken place regarding this ruling has a low risk to damage morale, motivation, and productivity.

Regardless of the size of the company, if overall the employees were ecstatic about the changes (either promoted to exempt or became eligible for overtime) and you made a positive compelling speech about the changes, it may be worth it to stay still and keep the changes intact. This option in this case, may be worth the added cost to boost morale and avoid employees becoming demotivated, disgruntled, and feeling as though they were demoted.

It’s probably safe to say that employees have celebrated and shared the news with their families about their wage increases while employers have cringed while calculating the added cost of making changes to their pay structures. Employers could “roll back” wage structures and conduct business as usual or stay still and keep the changes while we all wait on a final decision. Either way employers have options and should weigh the pros and the cons and do what is best for their company and their employees!