A Texas judge has halted implementation of new Department of Labor rules defining which employees are considered exempt from overtime. It was to take effect Dec. 1, but in response to a lawsuit by 21 states and several business groups, the injunction was issued Nov. 22.
The injunction does not mean the rule is dead. It gives the judge more time to make a final decision on whether it is being legally implemented.
Under the revised overtime law, anyone who makes $913 per week or $47,476 per year would be exempt from overtime pay. This is a jump up from the old rule of $455 per week or $23,660 per year, under the Fair Labor Standards Act.
The change is an attempt to help low-paid workers who put in lots of extra hours for no compensation. Some small business owners have argued that the shift will cost them too much.
If the change in the law is implemented, the salary threshold would rise again in 2020 and every three years after that.
The Department of Labor issued a statement saying it strongly disagreed with the judge’s decision, “which has the effect of delaying a fair day’s pay for a long day’s work for millions of hardworking Americans. The department’s overtime rule is the result of a comprehensive, inclusive rulemaking process, and we remain confident in the legality of all aspects of the rule.”
If the judge eventually does allow the rule to go into effect, it’s still possible the new administration may decide to repeal the rule or implement it in a modified fashion, or Congress might enact a law to address the overtime standards. Possibilities include:
- Leaving the rule as is.
- Repealing it completely.
- Implementing different or slower increases in the overtime threshold.
As some experts have pointed out, the process to change rules like this, once implemented, is not instantaneous. It may be some time — months or years — until changes are made, if they’re made at all.
President-elect Trump did not include this rule as part of his campaign platform, so it’s unclear how his administration will proceed.
Quoted in an article posted by the Society for Human Resource Management, Polsinelli attorney Jim Swartz said: “Given his relatively tepid reaction to the rule when questioned on the campaign trail, it is hard to imagine that Trump is willing to sacrifice political capital to roll back a rule that may well help many of his supporters.”
The National Law Review has published a look at the finer points of the rule. http://www.natlawreview.com/article/department-labor-higher-salary-thresholds-effective-december-1-2016
You can read more about the judge’s ruling and the opposition to the rule in a Washington Post story here.
