It has been widely reported that U.S. District Judge Amos Mazzant agreed with 21 states and a coalition of business groups that the new overtime rules set to go in place on December 1, 2016 were unlawful, and as such, he granted their motion for a nationwide injunction.
The new overtime rules would have increased the threshold under which employees would have been required to be paid overtime pay. Many employers were struggling to revise their employee classifications and wage structures to comply with the new rules. It has been reported that the change would have had a significant effect in nearly every sector of the U.S. economy, including nonprofit groups, retailers, hotels and restaurants.
The injunction will be in place until it is either appealed by the Department of Labor or the rules are reversed or amended. As you may have heard, there has been a major change at the top of the Executive Branch of the Federal Government, so it is possible that the Department of Labor will delay the appeal of the injunction until the new administration is in place in January. Since President-Elect Donald Trump has specifically addressed these new overtime rules as an example of burdensome business regulations, it is possible that the Department of Labor would withdraw the new rules or Congress could pass legislation addressing the issue.
So until we get further guidance, the overtime rules are staying the same as they have been for the past four decades. As many employers had already made changes to their employee classifications and procedures, they may need to reassess this issue again to determine how they comply with the rules. Since these types of Human Resource issues can be complicated, your company should consider discussing these issues with a qualified employment attorney.
Daniel Mace, CPA