Overtime Rule Delayed
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Last week, the U.S. District Court in the Eastern District of Texas granted a nationwide preliminary injunction from the implementation of the Department of Labor’s final overtime rule that was scheduled to go into effect on December 1, 2016 and would raise the minimum overtime eligibility threshold to $47,476, annually. The preliminary injunction was sought by two groups of plaintiffs that consist of 21 states and a combination of industry groups lead by the U.S. Chamber of Commerce and National Federation of Independent Businesses.
The Court determined that implementation of the final rule on December 1, 2016 would cause irreparable harm to businesses nationwide while agreeing with the plaintiffs that the Department of Labor exceeded their statutory authority pursuant to the Fair Labor Standards Act. It is important to note that this court ruling is limited to a delay of implementation of the final rule until a federal court can make a final determination on the merits of the case, which should be several months away.
Because a preliminary injunction is not a final ruling there are limited options for the Department of Labor to appeal the decision issued today and a very short window of time prior to the December 1, 2016 implementation date. The Department of Labor issued a statement disagreeing with the decision and stated they will explore all possible legal actions but have not filed a motion for an interlocutory appeal. NPMA will continue to closely monitor all developments but based on this ruling we anticipate the overtime rule will NOT be implemented as expected on December 1, 2016.
The preliminary injunction is promising for NPMA members. We have advocated against this rule since July 2015 requesting numerous rational fixes to the final rule including; delaying implementation of the rule, phasing-in the final rule, accounting for regional economic discrepancies and elimination of the triennial automatic indexing. The delay will enable NPMA and our partners in the Partnership to Protect Workplace Opportunity (PPWO) the ability to work with the incoming Trump Administration and 115th Congress to make the necessary fixes to overtime laws. There is still a lot of advocacy to be accomplished on overtime regulations and we will need your continued engagement on this very important issue to our industry. If you have any questions or concerns please contact the NPMA public policy team.
