A federal judge in Texas has issued a temporary injunction blocking the U.S. Department of Labor (DOL) from implementing new overtime pay rules that have been scheduled for December 1, 2016.
The Temporary Injunction
Judge Amos L. Mazzant III of the Eastern District of Texas ruled that the Obama administration and the DOL exceeded their authority by raising the overtime salary threshold so significantly.
The proposed overtime pay rules, that the DOL has scheduled for December 1, 2016 implementation, call for an increase in the mandatory eligibility threshold overtime pay requirement from $23,660 to $47,476 per year.
At this point it is not clear whether or not the Obama administration’s DOL overtime rule changes will be upheld:
- The injunction is a temporary measure which suspends the DOL new requirements until the courts can issue a final ruling.
- The Justice Department has indicated that it is reviewing the Texas court’s opinion and order and considering next steps.
- The Labor Department has indicated that it strongly disagrees with the Texas court decision and is considering all legal options.
- President-elect Trump has indicated that his new administration will strive to eliminate government rules and regulations that are burdensome to the business community.
If the pending DOL overtime pay rules are not upheld and implemented prior to the change to the Trump administration in late January, many experts consider it likely that the pending overtime pay rules could either be rescinded or more likely significantly moderated.
Your Agency’s Overtime Pay Rules Implementation Options
Pending resolution of the Texas court injunction, which challenges the DOL new overtime pay rules scheduled for December 1, 2016 implementation, businesses appear to have options ranging from deferring implementation until legal challenges are resolved to voluntarily implementing all or some portion of the DOL proposed rules changes.
The timing of the Texas court injunction creates complexities for businesses that have already initiated communications with employees relative to any modifications to base pay levels or changes to the companies overtime pay policies.
4A’s suggests that agencies carefully assess recent changes to overtime pay rules, monitor court rulings at the federal level, consult with capable legal counsel to understand your agency’s options and communicate your agency’s policies to your employees.
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