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Federal Overtime Rules on Hold

by Horizon Payroll Solutions on November 23, 2016
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Tuesday afternoon, a federal judge for the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction on the Department of Labor’s new overtime rules, which were slated to go into effect on December 1, 2016. The judge ruled that the Department of Labor (DOL) likely overstepped its rulemaking authority by raising the salary threshold as high as it did and implementing the automatic increase every three years.

What this means as of right now:

  • The effective date of the rules has been delayed indefinitely.
  • Employers may choose not to implement the changes they had planned for Dec. 1 compliance.
  • The new rules have not been thrown out or invalidated – at least not yet.

The judge has not made a final ruling in the case. We don't know when the final decision will be made. Employers are rightfully wondering whether they should move forward with the changes they have been planning. Here are some things to consider when determining whether to move forward:

  1. Will implementing the changes hurt the bottom line? If so, by how much?
  2. How difficult will it be to undo changes that have already been made?
  3. How do you expect your employees to feel about the decision? How did they feel about the expected/implemented changes?
  4. Is the new pay structure better than what is in place now? Why or why not?
  5. If the changes aren't implemented now, will it be possible to make them on short notice in the future if need be?

At this point, we don't know how long the injunction will be in place, if the rules will eventually be thrown out, or if the final decision will allow some parts of the rule to stand and not others. The DOL has indicated they are also considering their options with respect to the injunction.

We are keeping a close eye on this case and will keep you updated as actionable information is made available.

Questions? Contact us today.

Topics: Overtime