It’s time to weigh your options in this uncertain regulatory environment.
At Shiftboard, we’re used to unpredictability. In fact, dealing with the unexpected is one of our specialties. And in our experience, clear communication is key in dealing with sudden curve balls that you don’t see coming.
Last October, we hosted a webinar featuring expert insight around an update to the Fair Labor Standards Act (FLSA) that was scheduled to take effect on December 1st of this year. The change would have impacted overtime eligibility for more than 4 million Americans, and – by extension – affected operations for countless companies.
Our speaker provided an overview of the amendment, compliance concerns, and discussed potential considerations as well as possible options for businesses. That analysis also touched on the various legal and political actions in progress to contest the rule change. However, given the information available at that time, the takeaway was that the opposing measures carried minimal chance of success.
But that’s thing about long shots: sometimes they succeed.
This injunction temporarily blocked the scheduled update from taking effect, and the Department of Labor promptly appealed this development. The result? An extremely complicated situation that leaves both employers and employees in limbo until the legal system sorts this whole mess out.
So what now?
Nothing is certain, but given the complexity of the issue it is unlikely that the courts will issue a final decision before Inauguration Day. At that point, any prediction as to what a new administration or congress might do in relation to this matter is pure speculation.
For now, the overtime rule remains precariously suspended between ratification and rejection.
Then what are my options?
No one can predict the future, but preparing for potential developments is a good way to set your organization up for success.
1) Talk to a lawyer.
Your situation is unique, and there’s no way online articles can accurately evaluate the circumstances surrounding your business. That said, staying informed is important. So research this topic extensively to better understand what’s going on as well as potential options, then discuss your findings with a legal professional.
2) Consider employee morale.
If you’ve formally announced and/or implemented salary increases, it may be a good idea to stick with those raises. Some companies have already made the decision to follow through with stated increases to reinforce the bond between management and labor. Once you’ve set expectations, going back on your word could hurt employee morale and productivity.
3) Don’t act too soon.
As an employer, the outcome of this situation holds a variety of possible ramifications. So if you have not already disclosed plans for complying with the FLSA update, hold off on agreeing to, or carrying out any wage increases until there’s a resolution in court.
4) Don’t be caught unprepared.
Remember that this injunction is only temporary. If the decision is reversed and the FLSA rule changes take effect, there’s a chance the Department of Labor will enforce the new regulation retroactive to December 1st. Best to keep track of overtime for employees who would become eligible for overtime just in case. Extra recordkeeping and back-pay likely cost less than lawsuits and fines.
5) Keep employees informed.
Get your employees up to speed on the injunction, and notify them of your intent to follow through with announced pay raises or put the decision on hold until the issue is resolved. With possible contractual requirements and local laws dealing with advanced notice of compensation changes – not to mention the importance of adhering to company policy – keeping everyone updated as these events play out is critical to maintaining compliance.
Shiftboard will continue sharing insights from our legal experts as this situation unfolds. In the meantime, employers should consult their legal counsel for advice on how best to prepare for any potential regulatory changes on the horizon.
Whatever the outcome, remember that advanced people management tools that provide deep visibility into your organization can pay dividends far beyond maintaining compliance. For insights on how much a dynamic employee scheduling and management solution can benefit your bottom line, get a free demo from one of our scheduling experts today.