I’m sure you all know by now but a US District Court in Texas has issued an injunction preventing the US Dept of Labor from implementing their new planned overtime rule that was to take effect on Dec. 1.
What does this mean to you? Well, if you haven’t tackled the overtime issue yet it means you don’t have to scramble to deal with it. If you have already adopted changes it means you can CHOOSE to move forward with those or not at your own discretion, at least for now. I think we’ll see several of these “wait and see” approaches as we prepare for January 20 and the inauguration of President-to-be Trump.
Sean M. Miller
Kansas Building Industry Association, Inc.
212 SW 8th Ave., Ste. 201
Topeka, KS 66603
Office: (785) 232-2131
Fax: (785) 233-3518
Cell: (785) 393-1517
U.S. District Court Judge Issues Nationwide Injunction Preventing Implementation of DOL’s Planned Overtime Rule
Last night, U.S. District Federal Judge Amos Mazzant issued a nationwide preliminary injunction preventing the implementation of the Department of Labor’s Overtime Rule previously set to take effect on December 1. The proposed rule would have made 4.2 million private-sector workers eligible for expanded overtime protections. Employers are no longer required to meet the December 1 deadline. The rule was set to increase the exemption threshold to $47,476, more than doubling the current threshold and creating concern among many employers and small business owners.
Mazzant, a Texas Federal Judge, found that the Department of Labor had likely exceeded its statutory authority in setting a salary threshold higher than necessary to exempt “any employee employed in a bona fide executive, administrative, or professional capacity.” Because the current salary threshold increase was unlawful under the plain meaning of the statute, the Department of Labor “also lacks the authority to implement the automatic updating mechanism.”
While the Department of Labor is likely to appeal the decision, the timing is such that the fate of the overtime rule is now in the hands of the 115th Congress and the incoming Trump Administration. Until this rule is officially withdrawn by the Department of Labor or no appeal of the case is sought, it could come back again with an unfavorable ruling on appeal. The NAM will continue to advocate with policymakers in Congress and on the transition team about the excessive costs of $24 billion over the next 10 years to implement this rule.
U.S. Chamber of Commerce Senior Vice President of Labor, Immigration, and Employee Benefits Randy Johnson issued the following statement regarding the decision by the district court in Sherman, Texas to grant a preliminary injunction blocking the Department of Labor’s (DOL) new overtime regulation nationwide: “We are very pleased that the court agreed with our arguments that the Obama administration’s new overtime rule was unlawful and stopped the rule from taking effect on December 1. If the overtime rule had taken effect, it would have resulted in significant new costs – more than $1 billion according to the Congressional Budget Office – and it would have caused many disruptions in how work gets done. Furthermore, the rule would have reduced workplace flexibility, remote electronic access to work, and opportunities for career advancement. This is a great result.”
The NAM also issued a press release on the decision which can be found here. The full text of the District Court’s decision can be found here.
Arkansas Attorney General Leslie Rutledge released a statement after Mazant granted the request of 21 states to enjoin the U.S. Department of Labor’s (DOL) overtime rule.
This “injunction is an important victory that will help protect countless Arkansas business owners, nonprofits, sheriffs, mayors and county judges from increased costs and forced layoffs,” said Attorney General Rutledge. “Many across our State have expressed grave concerns about how they would continue to operate if the rule took effect next week. I am grateful to Judge Mazant for granting this important injunction until the full legality of the rule can be determined, and I hope the Department of Labor will ultimately reconsider this ill-advised rule.”
Rutledge joined a coalition of 21 states in filing a lawsuit challenging the rule. If implemented, the rule would likely force the State of Arkansas, local cities and counties and countless small businesses and nonprofits, to substantially increase their employment costs. Many entities might be forced to eliminate some services and fire employees because of the increased expenses.
President-elect Donald Trump has yet to say what his plans are for the overtime rule. He had previously said was in favor of exceptions for small businesses.