Updated overtime rule on hold

The change in federal law has been delayed by a judge.

BOISE -- It's a big decision that could affect hundreds of businesses and nonprofits across Idaho.

It all revolves around a change in federal law about how employees are paid, and what they're paid. An update to the law was scheduled to take effect next week, on December first, but now, it's on hold.

In May of this year, the U.S. Department of Labor announced a big change to the overtime rule.

It would raise the minimum yearly wage for salary employees who are exempt from overtime pay by a significant amount.

So for the past several months, Idaho companies have been preparing their employees and their budgets for a change that's now suddenly been stopped.

The Idaho Nonprofit Center is one of many trying to figure out what's next after a Texas judge made a big ruling Tuesday.

"The big question is now that this has been suspended, what are the steps we as organizations should take to address this temporary reprieve?" asked Amy Little, Executive Director of Idaho Nonprofit Center.

The current law mandates that anyone making less than $23,660 a year, must be hourly and get paid time and a half for working more than 40 hours a week. But the update would more than double that salary level to $47,476. It means that employers must either switch workers under that pay bracket to hourly and pay them overtime, or raise their salary.

But a judge put a hold on that change while a lawsuit challenging it works its way through court.

"We've seen some clients who have said let's put everything on hold and wait and other clients who had already done wage increases to prepare for it, and they said 'that's fine let's go through with it,'" said Steve Cilley, CEO of Ataraxis.

Ataraxis manages human resources for many Idaho business and has been working countless hours to prepare Idaho businesses for the new rule.

"The biggest issue with this is it came so late in the game, so many people had done a lot of prep work, we spent months with all our clients prepping to make sure this change was in place, so now that work is on hold," said Cilley.

The law would also affect nonprofits, which is why the Idaho Non-profit center spent the morning alerting their members about the decision.

"I think it's kind of a mixed bag, I think the big emotion is 'oh my gosh, we just got through putting this plan in place, now what are we going to do?' So, I think it was a bit of a shock," said Little.

Little says most had already adjusted staffing and pay to be in compliance, and won't switch back even with the change on hold.

"If you've already actually gone down the path to putting a plan together and being compliant with those changes, it really doesn't make sense to back pedal at this point," said Little.

Ataraxis says it's unclear when a decision will be made on the issue, especially with a new administration coming in. Tuesday's ruling also puts in question the Department of Labor's ability to set the wage limit for exempt employees.

Copyright 2016 KTVB


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