Overtime Pay Rule On Hold Nationwide

By Chava McKeel | November 26, 2016

On Nov. 22, 2016, U.S. District Judge Amos Mazzant in the Eastern District of Texas issued a preliminary injunction, blocking the implementation of the proposed Overtime Rule. Set to take effect Dec.1, the rule would have doubled to $47,476 the maximum salary a worker can earn and still be eligible for mandatory overtime pay.

It had been the subject of multiple lawsuits by 21 states and business groups, including the Chamber of Commerce, that had been consolidated before the federal district court in Texas. Judge Mazzant's decision not only stops the rule from taking place on Dec. 1, but also casts doubt as to whether it will be implemented at all.

As reported in a previous blog posting, the plaintiffs challenging the rule argued that the Department of Labor exceeded its authority under the Fair Labor Standards Act by drastically altering the minimum salary requirements and by establishing an automatic salary threshold increase every three years, to take place without notice or public comment. GCSAA has expressed similar concerns with the Department of Labor and filed public comments urging it to write a better rule with the input of all stakeholders, including golf.

While the injunction is not a final decision on the merits of the Overtime Rule, it does indicate that the plaintiffs challenging it have a significant chance of success at trial. Further, any decision to appeal either the injunction or any other decision by the court must be brought before the conservative Fifth Circuit Court of Appeals, where it would have a low chance of success.

All of this gives opponents of the Overtime Rule in Washington another option to kill it. Congress has the ability to defund the rule in appropriations legislation, that will now be completed after Donald Trump becomes President. Alternatively, it could repeal the rule outright using the expedited process allowed under the Congressional Review Act. But given the inclination of the Court, the incoming Trump Administration could wait for a decision striking the rule and simply decline to appeal.

What do I do now?

Because of the decision by a federal court, employee pay and work schedules may remain in effect as they were at the beginning of the year until this case is resolved.

Although the implementation of these regulations have been temporarily blocked, it is still important for positions to satisfy both components of the salary threshold and duties test to qualify for an exemption.

The chances of an appeal being limited and with the Trump Administration desiring changes to this rule, it is expected that this rule will not go into effect as it is currently constituted. However, there could be some change in the minimum weekly salary threshold proposed in 2017. As such, be prepared for additional discussions with staff if and when that happens.