New overtime rules for salaried workers delayed

Minnesota businesses and nonprofits are in a “holding pattern” over new overtime rules.

On Thursday, Dec. 1, Department of Labor regulations would have required overtime pay to salaried, “white collar” workers making under $47,892 a year. Or, employers would have had to re-classify the workers as hourly, which requires overtime. However, a federal ruling has this change on hold.

The new rules were released by the U.S. Department of Labor on May 23. Lawsuits followed, and on Nov. 22, a Texas federal judge delayed implementation by issuing a preliminary injunction.

“The practical effect is a judge in Texas issued a nationwide injunction saying these regulations violate the law, and that they can’t go into effect,” said Veena Iyer, an employment attorney at Nilan Johnson Lewis in Minneapolis.

Iyer, who advises businesses and nonprofits on employment issues, spent months advising clients on how to prepare for the new overtime rules. But now she is telling clients there is no reason to meet the deadline.

“Some, who had already decided to increase salaries where necessary, have decided to continue with that, Iyer said. “Others have decided it just won’t work from a budgetary standpoint, and in our holding pattern.”

The Minnesota Chamber of Commerce, which opposed the new rules, said some businesses will continue with changes.

“Businesses are likely to follow through with some of the plans they’ve made, but also likely not to follow through with some of the other elements of the plans they’ve made,” said Cam Winton, director of energy and labor-management policy at the Minnesota Chamber of Commerce.

The preliminary injunction can get appealed, and could even go the U.S. Supreme Court — but all of the legal maneuvers take time. Equally important is the date of January 20: when Donald Trump is sworn in as President.

“The new Administration has already indicated that it’s opposed to these regulations, so we’d have to see if they would even defend them,” Iyer told Fox 9.