The Hail Mary pass worked! 21 states filed an emergency motion for a preliminary injunction in October to stop the revisions to the overtime law. They believed that the DOL exceeded its authority in raising the threshold by almost double the current standard and by adding an automatic adjustment provision. Almost every lawyer and national organization told us this was a long shot and advised professionals to prepare for the December 1st implementation. When Judge Mazzant of the Eastern District of Texas, heard the case last week and promised a decision, those experts said the same thing, stay the course and be prepared.
They were wrong. The Department of Labor cannot create an evaluation based on salary only. Judge Mazzant’s ruling states that “the significant increase to the salary level creates essentially a de facto salary-only test. If Congress intended the salary requirement to supplant the duties test, then Congress-and not the department-should make that change.” The Department of Labor will probably challenge the decision. They have stated that they are considering all legal options.
This is not a permanent injunction. It preserves the existing overtime rule until the court has a chance to review the case against the updated regulations. However, per SHRM (Society of Human Resource Management), “the revised regulation may face an uphill battle: the judge wouldn’t have granted the nationwide preliminary injunction unless, among other things, he thought the states showed a substantial likelihood of succeeding on their claims.”
Employers do not need to make any changes to track or pay overtime to employees over the $23,000 threshold if they are exempt. If employers have adjusted salaries, it would be advised to leave them in place. It would be difficult to pull them back and we are still in a “limbo” status until a final determination is made. I believe there will be some adjustment, but it will be lower.
There will be a lot of monitoring of changes to this law and others in the coming days, weeks, and months. We will keep you informed as the changes come.
For now, enjoy your Thanksgiving. I’m thankful for the break in work next week that I just received. I think my table will have Texas roses this year!
#FLSA #overtimelaw #overtime #delay #humanresources