FEDS TO AP­PEAL JUDGE’S RUL­ING ON OVER­TIME PAY

Un­cer­tainty on over­time rules deep­ens, with Obama dig­ging in

The Denver Post - - FRONT PAGE - By Aldo Svaldi Aldo Svaldi: 303-954-1410, as­valdi@den­ver­post.com or @al­dos­valdi

New rules to ex­empt su­per­vi­sory work­ers from over­time pay and other re­quire­ments start­ing at $47,476 per year rather than the cur­rent $23,660 per year were sup­posed to kick in Thurs­day. But last week, a fed­eral judge in Texas un­ex­pect­edly blocked im­ple­men­ta­tion of the new rules.

The Obama ad­min­is­tra­tion plans to fight un­til the buzzer sounds to lift the thresh­old on who is el­i­gi­ble for over­time pay and other pro­tec­tions, adding to the drama faced by em­ploy­ers and salaried work­ers alike.

New rules to ex­empt su­per­vi­sory work­ers from over­time pay and other re­quire­ments start­ing at $47,476 a year rather than the cur­rent $23,660 a year were sup­posed to kick in Thurs­day.

But last week, a fed­eral judge in Texas un­ex­pect­edly blocked im­ple­men­ta­tion of the new rules. On Thurs­day, the U.S. De­part­ment of La­bor gave no­tice it would ap­peal that rul­ing rather than let time run out on one of its top pri­or­i­ties.

“It is in a state of limbo and we don’t know whether it will go into ef­fect or not. There are vary­ing the­o­ries on it,” said Ben Hase, an at­tor­ney with the Moun­tain States Em­ploy­ers Coun­cil in Den­ver ear­lier this week.

An es­ti­mated 4 mil­lion U.S. work­ers, in­clud­ing 70,000 in Colorado, could be­come el­i­gi­ble for over­time pay un­der the higher thresh­old.

Sup­port­ers ar­gue only 7 per­cent of full­time salaried work­ers now have over­time pay pro­tec­tion, ver­sus 62 per­cent back in 1975. That has left a door open for some em­ploy­ers to hire “man­agers” at a low salary and work them 60 or 70 hours a week, re­sult­ing in them earn­ing less than min­i­mum wage.

But op­po­nents counter that more than dou­bling the pay thresh­old in one fell swoop would be dis­rup­tive to busi­ness and would greatly re­duce the flex­i­bil­ity of em­ploy­ers and could re­sult in lower pay for many work­ers.

Many em­ploy­ers as­sumed the higher pay re­quire­ment for salaried work­ers would be adopted and planned ac­cord­ingly. They raised the pay of some em­ploy­ees to get them over the new thresh­old or con­verted other work­ers to hourly pay and trimmed their sched­ules to avoid over­time.

“Some peo­ple who pro­cras­ti­nated are su­per-re­lieved,” said Sonia Riggs, pres­i­dent and CEO of the Colorado Restau­rant As­so­ci­a­tion.

Many em­ploy­ers will likely fol­low through on any changes, but some may back track or try to re­turn to the sta­tus quo if the court throws the changes out or the in­com­ing Trump ad­min­is­tra­tion aban­dons the fight for the new rules.

“I have also heard some folks say we are putting em­ploy­ees back (to salary) or giv­ing them a dif­fer­ent in­cen­tive,” she said.

Com­pli­cat­ing the cal­cu­la­tion in Colorado is a 99 cent an hour in­crease in the state min­i­mum wage com­ing in Jan­uary, Riggs said.

“There will be a lot of dis­cus­sions in or­ga­ni­za­tions. There is a lot of un­cer­tainty,” said Renny Fa­gan, pres­i­dent and CEO of the Colorado Non­profit As­so­ci­a­tion.

If em­ploy­ers de­cide to back track or undo any changes, they need to tread care­fully, Hase warned.

“We are es­sen­tially say­ing if you made the change al­ready, it may not be a great idea to change it back, not just for morale pur­poses, but there may be some le­gal prom­ises there,” he said, adding it all de­pends on how things were pre­sented.

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