Countdown to New Overtime Rule
The December 1 deadline is fast approaching, but with the new federal overtime rules under attack in both Congress and the courts, many employers are uncertain about whether they should move forward with changes to comply, or wait and see.
Texas Litigation Seeks to Block Implementation
In mid-October, 21 states filed a lawsuit in the U.S. District Court for the Eastern District of Texas, asking the court to issue a preliminary injunction that, if granted, would stop the DOL from implementing the new rule. More than 50 business groups, including the U.S. Chamber of Commerce, filed a separate but coordinated legal challenge to the new rules in the same court. The plaintiffs have urged the court to expedite a ruling and have filed motions for summary judgment asking the court to render a decision without trial. The Texas litigation remains pending, but with time running out, it may be a long-shot to expect the court to render a decision enjoining the rules before December 1.
Congressional Action to Delay the New Rules
In late September, House Republicans, joined by five House Democrats, voted unanimously to pass a bill to delay implementation of the new rules by six months. A companion bill has been introduced in the Senate, co-sponsored by Senator James Lankford (R. Okla.), Sen. Lamar Alexander (R. Tenn.), and Senator Susan Collins of Maine. The White House has made clear, however, that President Obama will veto the legislation, so there seems to be no chance of a legislative block of the new rules before the December 1 deadline.
While it is unlikely there will be any relief before the December 1 deadline, some employers will be reluctant to implement changes if there is any chance the rule will be blocked and may elect to wait as long as possible before announcing and rolling out salary increases, job reorganizations, or changes in classification.