Economy

These Employers Are Going to Honor the Halted Overtime Rule

Despite a Texas federal judge's November 22 decision to halt the Obama administration's new overtime rules, some companies are still giving their employees the raises briefly mandated by the Department of Labor.

cashiers at grocery store

TJX, the parent company of T.J. Maxx and Marshalls, announced last week that they will still proceed in compliance with the overtime rules, which went into effect December 1, the Washington Post reports. Before the executive order was halted, the Department of Labor mandated that salaried employees be paid $47,476 per year, or be given overtime pay.

The initial overtime rules would have impacted over 4 million workers, and more than doubled the threshold for overtime pay, which has been set at $23,600 since it was last updated 12 years ago, as Vox explains.

“At TJX, we attribute our success primarily to the people we have hired over many years who remain focused on our mission of delivering amazing values to consumers," a company spokesperson told ATTN: over email. "TJX had communicated to impacted Associates in advance of the expected effective date of the proposed changes to the Department of Labor’s rules and moved forward as planned in implementing those changes."

Walmart raised entry-level managers' salaries from $45,000 to $48,000 in September in anticipation of the ruling.

"We are reviewing the ruling, but don’t anticipate making any changes to what we’ve already shared with our associates," a Walmart spokesperson told ATTN: via email.

walmart-sign

In a November 22 call with analysts, Dollar Tree CEO Bob Sasser said the company had been "preparing for and testing changes to our compensation structure in regard to the new (Fair Labor Standards Act) regulations," according to a transcript published by MSN money.

"We have communicated these changes to our teams to ensure our company's compliance when the new rule will become effective on December 1," Sasser said. ATTN: reached out to Dollar Tree over the phone and via email about whether the company will still abide by the overtime rules. We will update this post when we hear back.

Other companies will not institute proposed changes due to the Texas ruling. Kentucky based Italian restaurant chain Fazoli's is scrapping plans to convert 125 assistant general managers from salaried positions to hourly wages "because it's irrelevant now," CEO Carl Howard told the Wall Street Journal.

The legal battle has also hit home at research institutions that planned to raise researchers' salaries in accordance with the Department of Labor's overtime rules.

The US National Institutes of Health is still planning to raise its minimum salary for grants given to postdoctoral researchers to $47,484, the journal Nature reports.

lab technician

Duke University, the University of Minnesota in Minneapolis, and Boston University in Massachusetts are also raising postdoctoral researchers' minimum salaries to above the $47,476 threshold.

Institutions including Michigan State University, Purdue University, the University of Maryland, and the University of Michigan have canceled their plans, according to advocacy group the Future of Research. You can read a full list of institutions' responses to the Texas injunction on the Future of Research website.

Texas U.S. District Judge Amos Mazzant granted the preliminary injunction (PDF) in response to complaints filed by a coalition of business groups and 21 U.S. states, who argued the rule was too costly and would ultimately lead to lay-offs.

grocery store manager

The Department of Labor filed a notice to appeal the preliminary injunction December 1. "The Department strongly disagrees with the decision by the court," the Department of Labor said in a statement. "The Department’s Overtime Final Rule is the result of a comprehensive, inclusive rule-making process, and we remain confident in the legality of all aspects of the rule."

The Congressional Budget Office released a November report (PDF) claiming that cancelling the rule would cost affected workers $510 million in earnings in 2017 alone.

Judge Mazzant's decision was celebrated by Republican leaders including House Speaker Paul Ryan (R-Wis.) who argued that the ruling would hurt small businesses, non-profits, and lead employers to cut salaried positions.

President-elect Donald Trump has not condemned the rule as strongly as some of his fellow-Republicans. However, he spoke about rolling it back, delaying it, or creating "a carve-out of sorts" for small businesses in an August interview with the website Circa.