Court Preliminarily Halts Overtime Rules

Gavel-Court

BLOCKED! Court Preliminarily Halts Overtime Rules With Last-Minute Ruling
Rules Will Not Take Effect On December 1; Future Thereafter Uncertain

On November 22, 2016, District Court Judge Mazzant blocked the U.S. Department of Labor’s (USDOL’s) overtime rule from taking effect on December 1. The fate of the overtime rules is now uncertain. Unless an appeals court reverses course in the next several weeks and breathes new life into the rules, it is quite possible that the rules will be further delayed, completely overhauled, or altogether scrapped once President Trump takes office.

What are the possible scenarios now?
It is possible that Judge Mazzant might be swayed by USDOL arguments in the coming weeks, or that an appeals court could step into reverse Judge Mazzant’s ruling before President Trump takes office. As the judge said in his opinion, it could be that this ruling “only delay[s] the regulation’s implementation.”

Assuming that the injunction survives the remainder of President Obama’s term, it is difficult to predict what President Trump will do with the rules once in the White House. Perhaps President Trump will direct his USDOL to commence a new rulemaking process, subject to notice and comment, with the goals of setting lower thresholds for the salary requirement and eliminating the three-year update, among other changes. How long and what form such a process would take, and what could or would be done in the meantime, are currently unpredictable.

What should employers do now?
Some employers might find themselves in a difficult spot.

If you have already made alterations to your compensation plans or to your employees’ exemption status, it might be unpopular to reverse course now. Although you may have the legal right to revert to the status quo depending on your circumstances, you might consider waiting until a final decision is reached in court, Congress, and the White House before doing anything further.

If you had been waiting until December 1 to implement the changes, you have the option of putting any alterations on ice and awaiting a final determination on the fate of the rules. If you do so, you might consider communicating to your workforce that the expected changes are going to be delayed given today’s court ruling, and let them know that you will continue to monitor the situation and make adjustments when and if appropriate.

For more details, read the full Fisher Phillips LLP Legal Alert here.

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