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Compensation

Headaches Ensued in Last-Minute News of Overtime Rule’s Rejection

A judge's dismissal of the Labor Department's overtime plan meant unnecessary work and frustration for workers across many industries.
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Planning for the new overtime rule was largely for naught after a judge rejected it Nov. 22.

With only four business days remaining before the Department of Labor’s new overtime rule would go live, a federal judge in the Eastern District of Texas overturned it. The rule, which would extend overtime pay to an estimated 4 million workers, required human resources departments across the country understand the rule, update their processes and train workers on submitting hours. It now seems that all that work was for nothing.

When I shared NPR’s story about the news, comments to my post on Facebook included sentiments of “this sucks,” “this blows” and “ugh.” People are not happy. Managers and employees from a variety of industries such as health services, marketing and education all were impacted.

“When I first heard about the law going into action, I was ecstatic,” wrote Steven Stojak, HR coordinator at Erie Family Health Center Inc. He thought about his past work in retail and his manager often receiving the same pay as hourly employees for doing the same amount of work. This new rule could have benefited those types of workers.

Please also read: With New Overtime Rules DOA, What Now for Employers?

Stojak and his team got to work on their company’s updates to comply with the new overtime rule, exploring options around giving employees raises, converting workers to hourly, changing vacation time and more. “It was stressful, and after months of deliberation we finally came to an agreement. We sent out communications to staff members with raises, updates to hourly wages, etc.” When the news came out that the update wouldn’t happen, he was irritated.

Gabriela Silva, an instructional designer at the University of Illinois, responded to the overtime rule by creating training for the many employees who would have to report their time. Leading up to the Dec. 1 start date, she and her colleagues spent several hours each day working out the kinks. Now that the rule is no longer in effect, frustration ensued. “A lot of time and effort was spent (not just mine and not just my employer’s) for what seems to be nothing now,” she said. “If they were going to block the ruling, did they really have to wait until the last minute?”

Hatie Parmeter, a senior writer at Brafton, a marketing agency, attended training about the rule mere hours before Amos L. Mazzant III of the Eastern District of Texas overturned it. In training, HR updated her with information about the overtime rule, how it would affect employees and the reclassification of the company’s workers.

She feels her reclassification to hourly would have put a damper on her resume, as a status of “salaried” carries more weight than hourly work when applying for jobs. “Even if you’re earning the same wage but you’re listed as full-time hourly you are sort of looked down upon, in my opinion.” That being said, she hopes similar overtime legislation is passed in the future to positively impact lower-income workers “who are working their butts off and not earning proper pay.”

Although Stojak and Silva put in a lot of time to comply and train for the updates, they’re more concerned about workers who put in extensive hours without additional compensation. “This law was invented for them, and I can’t imagine how frustrated they must be to have been so close to fairer compensation, only to have it snatched away a week before,” Stojak said.

“There are so many people that are struggling to survive on their wages and salaries,” Silva added. “To not allow a person who barely makes $26,000 a year receive overtime pay for a 50-hour workweek is unfair.”

Lauren Dixon is an associate editor for Workforce’s sister publication, Talent Economy. Comment below or email editors@workforce.com.

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