A 2016 Political Football: The New DOL Overtime Exemption Rule

cm-blog-overtime-pay-imageReady…Set…OH WAIT! The U.S. Department of Labor’s (DOL’s) controversial new rule on overtime exemptions was to take effect this week, on December 1, 2016. (See our previous blog here ) 21 States and various business organizations have fought against implementation of the rule; and now, their efforts have paid off – at least for a little while. On November 22nd, Judge Amos Mazzant of the U.S. District Court for the Eastern District of Texas ruled that DOL overstepped its authority and stopped the rule from taking effect. This will preserve the status quo until the court can determine the DOL’s authority to make the final rule as well as the final rule’s validity.

It is important to note that the courts’ injunction is only temporary and the final outcome will depend upon several issues. For now, everything is up in the air.

So, what should employers do now? The answer depends on what employers were already planning to do and how far along those plans are. Were salaries going to be increased? Has that already been conveyed to the affected employees? Were potential misclassifications converted? A balance between business needs, including implementation costs incurred thus far, reversal costs, and employee morale will need to be taken into consideration. Regardless of where an employer is in the process, it should seek legal guidance as to what its current options are, and how to ultimately communicate those options to its employees.

Your Culhane Meadows, PLLC, Labor and Employment Practice Group stands ready to assist you in this ever-changing process. Feel free to contact Terese Connolly (tconnolly@culhanemeadows.com), Harve Linder (hlinder@culhanemeadows.com), or Jennifer Rodriguez (jrodriguez@culhanemeadows.com) for further guidance.

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