This was welcome news to millions of workers with the potential to get a wage increase as a result of these changes. However, the news was not necessarily welcome to all employers who did not anticipate such a wide shift in their payroll expense and ultimately, their profit margins.

The new overtime rules, which were set to take place on December 1, 2016, did not take effect as planned.

What happened

Twenty-one states joined a number of businesses as well as the Chamber of Commerce in seeking an injunction to stop the rules from taking effect, citing them as unlawful.  A federal judge stepped in blocking Obama's efforts to increase the overtime salary threshold.

Though salary thresholds were determined from the lowest wage earning data, in the southern United States, groups fighting the change claimed the wage amounts to be subjective. U.S. District Judge Amos Mazzant prepared a ruling stating that the Department of Labor could not decide which employees would be eligible for the new overtime thresholds based on salary alone, citing the FLSA standards test for exempt employees.

While it has always been the case that employees who are considered executives or performing of professional job functions could be considered exempt from overtime, critics cited that the new rules did not re-address this test.

Affected employers rejoice at their potential cost savings while the Department of Labor is still standing its ground by pursuing next steps to push the rulings through, which can include an appeal. President-elect Trump has called the new law "burdensome" and is already foreshadowing a negative response to the regulations, which would affect more than 4 million workers looking for pay relief.

The federal case currently sits in the Eastern District of Texas and is No.16-cv-731, Nevada vs. U.S. Department of Labor.

Employers should still prepare

As of this printing, there is no way to know if and when the new rules will ultimately take effect. In the meantime, employers should focus on staying in compliance with current laws and prepare as if the regulations will survive the injunction hold-up.

According to the Department of Labor, employers should access their workforce compensation plans and determine what employees and jobs are affected. To comply with the potential law change, employers should do the following:

• Consider all options: determine the different ways you can proceed and be sure to address all sides that will be impacted by that decision: employees, managers, customers etc.

• Assess the costs: consider the costs of raises and re-classification, but also the damage to employee morale or potential litigation.

• Keep accurate records: wage and hour data has never been more important, and unified payroll and time & attendance technology help you track employee hours and view compensation to help make informed decisions about next steps.

• Be transparent: inform all employees/stakeholders of the situation and be ready to notify them if any changes occur.

Automated workforce management is more critical than ever

Is your workforce management system prepared to track the potential changes the new overtime rules will bring? Time tracking systems should have each employee properly classified; track hours and tasks by employee; assist with budgeting and scheduling procedures; calculate overtime pay and produce reports that will aid in monitoring the impact on your workforce.

Today's cloud-based time and attendance tracking systems are necessary to reduce the risks associated with non-compliance in light of the pending FLSA overtime rule updates. Tracking time and attendance accurately will provide a real-time analysis of overtime exposure as well as areas that can be better managed to reduce costs and mitigate risks. 

Productivity is the key to any workforce plan. Without an automated workforce management system to provide a consistent measure of overtime allocation, employers can quickly get into a situation that is out of control and costly.