On November 22, 2016 a federal judge from the Eastern Judicial District in Texas issued a nationwide temporary injunction halting the Department of Labor’s implementation of the new overtime rules scheduled to go into effect December 1, 2016. The lawsuit was filed by 21 states attorneys generals and several employer groups. Based on the ruling, the Judge reasoned that the significant increase in the salary level effectively eliminated the duties test and exceeded the statutory authority of the U.S. Department of Labor (“DOL”). This injunction does not mean the OT rule changes are gone forever. They are simply on hold pending the final outcome of the lawsuit in east Texas.
This injunction means that employers do not have to implement the changes to employee classifications and pay by December 1, 2016. Given the timing of the decision, however, many employers may have already implemented the required changes. Furthermore, if the DOL is successful in the east Texas lawsuit, then the implementation of the rule may be immediate. Unfortunately this development leaves employers between the proverbial “rock and a hard place. “ To add complication to this issue, it is possible that the Trump administration will roll back this regulation if not eliminate it altogether.
Based on the current legal and political maneuverings regarding the new OT rule, employers who have not yet taken action would be best advised to halt any planned implementation of the new OT rule pending either revisions from the new administration’s DOL, or the resolution of the east Texas lawsuit. Employers should consider consulting an employment attorney for further guidance.
The Greater Gardner Chamber of Commerce will keep our members advised as the situation changes or as more information becomes available.