Monday, December 5, 2016

DOL Appeals Overtime Rule Injunction

As expected, last week the Department of Labor filed an appeal from the temporary injunction issued right before Thanksgiving putting a hold on the new overtime rules which were set to take effect last Thursday.

As we previously noted, though, the Texas federal court issued that temporary injunction while it considers a ruling on the legality of the new overtime rule as a whole. Twenty one states and a number of businesses sued the Department of Labor claiming that the DOL exceeded its authority when it issued the new overtime rule that more than doubled the minimum salary threshold for executive, administrative and professional exemptions to the FLSA overtime requirement along with building in a periodic automatic increase of that threshold tied to the cost of living.

In its appeal, the DOL requested an expedited timetable from the court. Those familiar with legal proceedings will not be surprised to learn that in seeking to fast track the case, the DOL suggests that the case be fully briefed by February 7, 2017, with a hearing to follow – not exactly lightening speed to most people.  Even on this timetable, a decision from the 5th Circuit Court of Appeals will likely not issue until early Spring 2017.

Regardless of the outcome of this appeal, the underlying case is still pending in the Texas federal district court, with no firm timetable on a decision, and that decision, when it issues, could be appealed as well. Just to add to the uncertainty, by the time the 5th Circuit hears the appeal, a new president will be in office who will change the leadership at the DOL, creating a possibility of a change in direction on the case.

In the meantime, employers should just maintain status quo on exemption classifications of their workers. The future of the new overtime rule remains uncertain for the near future, making any changes that were not in place prior to the injunction issuing, unnecessary in the short term.