Business Strategy | Legislative / Regulatory

Federal judge puts DOL overtime rule on hold

A macro shot of a clock striking five.

Feeling a bit of angst over the new Department of Labor overtime rule?

Take a deep breath. You might have a bit more time comply … if you have to comply at all.

A federal judge in Texas has issued a temporary injunction that stops the implementation of the new rule.

“Due to the approaching effective date of the Final Rule, the Court’s ability to render a meaningful decision on the merits is in jeopardy,” Texas U.S. District Judge Amos Mazzant wrote. “A preliminary injunction preserves the status quo while the Court determines the department’s authority to make the Final Rule as well as the Final Rule’s validity.”

In other words, nothing changes until the courts have a chance to take a closer look.

The rule, which was to take effect on Dec. 1, would have more than doubled the salary at which workers would qualify for overtime pay. Under the DOL’s new rule, anyone who makes $47,476 or less annually would qualify for overtime pay. The current threshold is $23,660.

The MACPA is among the scores of business groups nationwide that have opposed the new rule. The association at first opposed the rule outright, then — when it became clear that the DOL was intent on increasing the overtime threshold — called for a three-year phase-in period to allow employers to absorb some of the new rule’s hefty compliance burden.

Where we go from here is anybody’s guess. Here’s what The Hill reporters Tim Devaney and Lydia Wheeler have to say:

Experts say the litigation and possible appeal process is likely to drag out until the inauguration, which means President-elect Donald Trump could scrap the overtime changes by dropping the defense of the rule.

"Mr. Trump and his hand-picked Secretary of Labor will have a lot to say about whether the DOL will continue to pursue the rule in one form or another," said Ryan Glasgow, a partner at the D.C. law firm Hunton & Williams LLP.

Trump has vowed to roll back Obama regulations that he says are hurting the economy. He expressed support for changing the overtime rule during the presidential campaign.

“Rolling back the overtime regulation is just one example of the many regulations that need to be addressed to do that,” Trump told Circa in August. “We would love to see a delay or a carve-out of sorts for our small business owners."

As if things weren’t complex enough, now we have to wait to see how all of this shakes out in the courts.

Stay tuned …


Bill Sheridan