EMPLOYER COMPLIANCE

The New Overtime Rules are Put on Hold. What Does That Mean for You?

By Mike O’Brien  bio

As most of you know by now, I’m sure, the United States Department of Labor (DOL) has finalized a new Fair Labor Standards Act (FLSA) rule that, among other things, raises the minimum salary threshold required to qualify for a “white collar” overtime pay exemption to $47,476 per year, which is $913 per week. This basically doubles the minimum salary threshold. DOL had set a deadline for employer compliance by no later than Thursday, Dec. 1, 2016.

Many Republicans in Congress have opposed these new regulations and it is possible that President-elect Donald Trump’s DOL will repeal them. Several states also sued to block the rules.

The federal court has now issued a ruling that applies nationwide that temporarily puts the new rules on hold.

Our new blogger, employment attorney Mike O’Brien, offers his insight into what you should do about the overtime rule until this issue is resolved.

What does the court ruling mean?

The court has issued a preliminary injunction, which is intended simply to preserve the status quo until the court can resolve the issues raised in the lawsuit. The court concluded that it would do more harm to let the new regulation go into effect while the lawsuit is being resolved than it would to just put the lawsuit on hold for now until the court sorts through all the issues.

Although it is not always true, sometimes the issuance of a preliminary injunction like this one can mean the court sees legal problems in the regulations. However, that specific issue—the merits of the lawsuit and whether or not the new regulation will stand—will not be resolved until later.

What about the upcoming deadline?

Well, it is no longer a deadline, which means that employers do not have to change/raise their minimum exemption salary thresholds for now. You can go ahead and make the changes outlined in the new rule if you still want to do so, but as a legal matter, the old rules will still apply for now.

Obviously, the uncertainty of the current situation can cause disruption. If you have already made, or told employees you were going to make, the required changes, you probably should talk to your employment lawyer about what to do and about the pros and cons of revoking or postponing the planned changes.

If the court eventually allows the new rule to take effect, the court also is likely to give employers some notice and a new deadline to comply. If and when that happens, you can read about it here.

How does the recent election affect all this?

That’s unclear for now, and the uncertainty may last for a while. As noted above, the new Congress may attempt to revoke the rules. President-elect Trump may reverse the regulations when he puts his team in place at the DOL. The current DOL has said it will continue to fight the litigation.

However, it is also possible that once he takes office in January of 2017, Trump will instruct the DOL to stop fighting the lawsuit, which could leave the new regulations effectively enjoined on a permanent basis.

Stay tuned for updates.


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