Wednesday, December 7, 2016

DOL Appeals Overtime Rule Injunction

And the beat goes on (and on, and on…)

This is becoming an almost never-ending saga. So, the U.S. Department of Labor (DOL) filed an appeal with the 5th U.S. Circuit Court of Appeals December 1 against the injunction put in place the week before blocking the new overtime regulations. The DOL has since requested that the court fast-track that appeal. However, even if the court agrees to expedite the schedule, it won’t take any action until at least February; after President-elect Donald Trump takes office.

The DOL states in its filing that that the federal district court judge’s injunction stopping the rule "rests on an error of law and should be reversed." Judge Mazzant had called into question DOL’s authority to establish a salary-basis test for overtime eligibility under the Fair Labor Standards Act (FLSA). The answer to that, I guess, will be litigated in the court during this whole legal process.

But what does this mean and where does it leave employers? With a severe case of whip-lash? I guess that answer really won’t suffice, will it?

If you were dragging your feet and had not made any changes (raising salaries above the threshold or converting previously exempt positions to non-exempt), it means you don’t have to do anything right now, if you choose. One caveat: IF (and this is really an unknown "if"), the court reverses the injunction, the DOL’s rule could be put back into place with a retroactive effective date of December 1. Yikes! Yes, theoretically, it could mean you’ve been in violation all this time and subject to a thrashing (monetarily and otherwise) from the DOL. However, I am quite sure that would also end up in court arguing that it’s unreasonable to hold businesses responsible for not complying with a law that was enjoined by a federal judge.

If you’ve already raised some salaries to above the threshold, you really need to think about the morale issues involved in reducing those salaries back to pre-rule levels. Not to the mention, attempting to explain what the heck happened and deal with the confusion employees are sure to experience. Nothing is ever easy.

Going forward, there are a couple of possible outcomes. When Trump takes office on January 20, 2017, he could withdraw the appeal. That would maintain the temporary injunction and allow the case to be fully heard in court as was originally planned by the two parties who filed the suits. At that point, it will be up to the judge to decide if the DOL’s rule will survive at all.

Or, President Trump could instruct the DOL to withdraw the rule all together. Game over.

While there are some other possibilities involving what might happen if the appeal is heard in the 5th circuit, it seems unlikely to get that far.

I know one thing for sure; the next 4 years will be very interesting in terms of employment law and workplace regulation. I might even use the terms "exciting" or "encouraging", but that may depend on which side of the issues you’re on.

And you thought HR was boring.

1 comment:

  1. So does this mean all the McDonald's supervisors are no longer exempt? I just don't know of any making over $47K.