Overtime Rule Implementation Still in Flux

Recent actions taken after a U.S. district court in Texas issued a preliminary injunction of the Department of Labor’s new overtime rule last month have caused confusion for employers, including colleges and universities, about how to proceed.

On December 2, the Obama Administration appealed the injunction with the U.S. Fifth Circuit Court of Appeals in Los Angeles. The next day, it filed a follow-up motion asking the Fifth Circuit Court to expedite its ruling on the appeal, citing the December 1 implementation deadline that was part of the final rule.

NAICU counsel, Franczek Radelet, has analyzed the timing necessary for the court to rule on the appeal and does not see such a ruling possible prior to President-elect Trump taking office in January, striking a blow to the Obama Administration’s plans for implementing the final rule. President-elect Trump has stated publicly that the overtime rule is an example of bureaucratic overreach by the Obama Administration.

The employer community seems to be divided over whether to move forward with implementing job reclassifications and salary adjustments based on the original rule, or halting any planned changes until a conclusion has been reached. Franczek Radelet is advising their clients to weigh their options carefully since the preliminary injunction might still be overturned, and the original rule could stand with a retroactive implementation date of December 1. At a minimum, they recommend having employees below the proposed salary threshold document their hours until the dust settles.