The new overtime rule has been stopped — but for how long?
Tuesday, November 29, 2016
A new salary limit for the Fair Labor Standard Act's overtime rule was supposed to take effect Dec. 1. But the changes, which would affect about 4 million workers, have come to a screeching halt after a preliminary injunction by a federal judge in Texas last week.
The new rule would have allowed more employees to qualify for overtime pay by raising the minimum salary of "exempt" employees from $23,660 to $47,476. So what does this court ruling mean for both businesses and their employees?
Attorney generals from 21 states agreed that the ruling needed to be blocked — the lead plantiff being Nevada. Because the Eastern District of Texas has a reputation of handing down rulings so quickly, Nevada Attorney General Adam Paul Laxalt knew they'd be able to get a quick ruling and block the changes.
"The decision was made based on a bunch of variables, but we thought we may be able to get the quickest answer," Laxalt told The New York Times. "We were really fighting the clock."
And just like that — in the dwindling days of the Obama administration — U.S. District Judge Amos Mazzant "ruled that the Obama administration had exceeded its authority by raising the overtime salary limit so significantly" and that it would cause severe hardship, as well as negatively impact the budgets of governmental programs and services.
The U.S. Department of Labor strongly expressed its disagreement with the decision, and federal officials are considering all of their legal options. However, the injunction was hailed by numerous retail and business groups, including the National Retail Federation.
"The rules are just plain bad public policy, and we are pleased that the judge is allowing time for the case to go forward before they can go into effect," said NRF senior VP for government relations David French. "We hope the judge ultimately finds in our favor, and in the meantime this timeout gives Congress a chance to take another look at the impact of these rules."
While the lawmakers duel it out, businesses should decide what's best for them and their employees.
"Even if the clock runs out on any Obama administration appeals, many employers have already promised higher pay and better hours to their workers," Leslie Csonka of Mercer said to MarketPlace. "For those that have already started communicating, this will be kind of difficult to reel back, and tell employees they’re not going to be eligible for overtime after all, or that they won't get a salary increase."
So do you have to do anything by Dec. 1?
No. For now, the new overtime rule will not take effect, and the old rules still apply. That said, the rule could take effect at a later date since the injunction is a preliminary one and can be appealed.
In the meantime, businesses and employees will just have to play the waiting game.
- Business Management, Services & Risk Management
- Civil & Government
- Travel, Hospitality & Event Management
- How employers are helping employees reduce student loan debt
- Report: Only 6% of US companies offer comprehensive child care benefits
- 3 ways to make your supply chain more resilient
- Millions of high school students set for success: Celebrating Career and Technical Education Month
- Tips for interrupting unconscious bias
- To fight crime, engage kids in quality after-school programs
- 10 negative employee behaviors that undermine success
- Study: Researchers search for better ways to nix inventory errors
- CES 2021 highlights the federal force behind a new era in technology
- 10 simple reasons companies keep failing at strategic execution
- Governance: Plain and simple
- Study: How job seekers’ social media profiles affect employability
- What to see and do in America’s newest national park
See your work in future editions
Your content, Your Expertise,
Your Industry Needs YOUR Expert Voice & We've got the platform you needFind Out How