In a November 22nd order, U.S. District Judge Amos L. Mazzant issued a nationwide, temporary injunction blocking the implementation and enforcement of new overtime rules issued by the Department of Labor (DOL) and scheduled to go into effect on December 1, 2016. The judge concluded that DOL exceeded its authority by raising the salary cap below on which all workers must receive overtime pay from $455 a week to $921 a week (or $47,893 a year). The DOL originally estimated that over 4 million workers would become eligible for overtime pay under the new rule.
What does this mean for employers that have spent months making personnel and policy adjustments to comply with the new overtime rules? For now, limbo. In a statement, the DOL indicated that it is considering “all of our legal options.” Those options include an immediate appeal to the Fifth Circuit Court of Appeals or a “wait and see” stance that lets the injunction stand pending the upcoming change in administrations.
While the issues play out, employers should consider the following and contact counsel with any questions:
- Employers that have plans to alter employee salaries or convert their status (exempt or non-exempt) may choose to table those plans for the time being since the rule is estopped from being effective on December 1, 2016.
- The situation remains fluid and depending upon how the parties and courts proceed, the rules may yet “go live.” Employers should remain ready to implement changes on short notice if need be.
- If changes to salaries or status based on the rule change have already been announced in your workplace, proceed with caution if consideration is being given to rescission. Both legal and employee-relations issues may ensue.
The attorneys at FisherBroyles will track any further developments with regard to the stay and the actions of the DOL regarding the overtime rules. Please do not hesitate to contact any of the following with any questions or concerns.
Brian E. Dickerson