Missouri State University is among the employers rethinking how it implements new overtime pay rules after a federal judge recently issued a temporary injunction halting the change.
In a memo to employees Tuesday, MSU President Clif Smart said the decision against the new Fair Labor Standards Act (FLSA) came as a surprise given the late date and impact on the process for so many entities. The Department of Labor is appealing the ruling.
“The possible outcomes of the temporary injunction range from the court of appeals siding with the DOL, to possible changes to the new rule at some future time, to the new rule never being instituted. With a new administration taking office on Jan. 20, 2017, it is very difficult to predict the final outcome,” Smart said.
In the meantime, MSU says it has suspended implementation of a portion of the FLSA-related changes until a resolution is clear. Employees who were reclassified as “professional non-exempt” will return to “exempt” status. More than 180 university employees had transitioned from salaried, or exempt, to hourly, or non-exempt.
The schools also notes that employees who received an increase in salary effective Dec. 1 will retain those raises.
President Clif Smart spoke to KSMU in August as the school was preparing to implement procedures for complying with the law.
“This is gonna be a rule that primarily impacts staff because of the teacher exception – all of our faculty members, including instructors, are exempt – and so the overtime rules don’t apply to them,” said Smart. “So then we focus on our executive, professional, administrative employees. And we probably have about 150 to 200 people that are gonna be in that category of making more than the old minimum but less than the new minimum.”
MSU said its decision to suspend part of the FLSA implementation comes after consulting with many universities, local entities and others to determine logical steps to take.
The FLSA establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments. The new rule, which was set to take effect Dec. 1, was to increases the minimum annual salary for exempt employees from $23,660 to $47,476.