The new overtime rules were set to go into effect tomorrow, December 1. The rules are on hold as a result of an injunction issued by a federal judge. What should charities do about changes that have been implemented, or announced, or on the drawing board?
(Cross-post from my other blog, Nonprofit Update.)
Two articles have some suggestions:
11/29 – Baltimore Business Journal – Plenty of questions still surround blocked overtime pay law – It is very uncertain how the new overtime rules will be handled. Article cites the CEO of an outsourcing and payroll company. His advice is stay tuned to developments. The rules could be implemented, overturned, or modified.
The CEO suggests companies (and charities) that have made changes need to consider the strategic, competitive, and morale implications of undoing any changes that have already been made.
11/29 – CFO magazine – Is Court Ruling on Overtime Regs the Last Word? – Article points out there are many ways the court case could go. The judge could make the injunction permanent, DoL could appeal and a higher court reverse the injunction, a hearing could reinstate the rules, a court (trial or appellate) could reimpose the rules with a lower threshold for overtime, or the new administration could tell new DoL staff to agree to the injunction.
That makes it messy for companies and charities in process of implementing the rules.
Here is advice from a named attorney in the article which I will quote under fair use:
- If you have already made changes in response to the DoL regulations, stay the course until there is greater clarity.
- If you have already announced such changes but not implemented them, stay the course by implementing the changes.
- If you have neither implemented nor announced changes, stay the course by doing nothing until there is greater clarity.
The behavioral impact on morale and motivation of staff could be damaged if raises or improvements or other changes have been made but are then pulled back.
Think carefully how to respond. Think through for yourself how political issues at the national level could affect the case. Please think through all dimensions of your response.