|Overtime Rule Update|
DOL Overtime Rule Update
Hugh Webster, Partner, Webster, Chamberlain, Bean, LLC, and AMCI's legal counsel, provides the following update on the most recent developments with the Department of Labor Overtime Rule that was set to begin December 1, 2016.
As has been widely reported in the news, a federal judge in Texas has temporarily blocked the new federal overtime rule from going into effect, which it was scheduled to do this week (December 1). The judge’s ruling is nationwide in scope. Therefore, pending further action, the December 1 implementation date will be postponed.
This is an unexpected curve ball thrown at employers who made changes in anticipation of the overtime rule becoming effective. One option for employers is to shelve those changes (e.g., salary raises, job reclassifications, time keeping procedures) indefinitely, pending further direction from this court (or an appeals court). Certainly it would make sense to hold off on any reclassification of an employee from exempt to nonexempt that had been planned due to the new overtime rule’s increased salary threshold.
The future of the new overtime rule is now anyone’s guess. This judge could later decide that the rule is valid; the injunction he issued this week is not a final decision on the merits. Or, a court of appeals could reverse the judge. But it is also unclear whether Departments of Labor and Department of Justice officials will seek an appeal with only weeks left to go in the current Administration. Political observers have speculated that the incoming Administration would not pursue an appeal of the judge’s ruling. There are also bills pending in Congress to delay or modify the new overtime rule, which, if passed by Congress, may be viewed more favorably by the incoming Administration.
We will continue to monitor the status of the overtime rule and will provide further updates as they develop.