If you are like many of my clients, this is a very important question for you. We have been planning for how to address the new DOL rules on the increased salary threshold for classifying an employee as exempt to become effective on December 1, 2016.
With the presidential election result that happened and pending court challenges, we may question whether to launch ahead on preparing employees for this change or not. As of this moment, Dec. 1, 2016, is still the effective date. President-elect Trump has suggested he may at least order a small business exception to the rules, but he can do nothing until he becomes President at the end of January, 2017.
Twenty-one states have filed challenges to the overtime rule. Their position is that the DOL did not have the authority under the Fair Labor Standards Act (FLSA) to set a salary level for exempt employees and that an automatic triennial increase violated the Administrative Procedure Act's notice-and-comment regulations. A number of business groups have filed legal challenges to the legality under FLSA to increase the threshold salary level or for the automatic increase as well. The lawsuits have been consolidated in one case in the Eastern District of Texas.
There was a hearing Nov. 16, 2016, in that lawsuit on whether the implementation of the new overtime rule should be temporarily barred. A decision is expected possibly by Nov. 22 on the motion for a nationwide injunction to delay the rule’s implementation. Interestingly, the judge in this case said during the Nov. 16 hearing that he will not consider what president-elect Donald Trump will do with the rule. His comment was that he is focused on the legality of the regulation before him.
Attorneys familiar with the case say that if the state’s motion for temporary injunction is denied, the court will hear a summary judgment motion filed by the business groups on the legality of the new rule to declare it unlawful.
Very Uncertain Outcome
On either motion, the outcome is very uncertain. Looking into a crystal ball will yield as accurate a prediction of what this court will rule as any well-versed attorney could make. Both injunctions and summary judgments are difficult to obtain in court. Employers should not count on either remedy to forestall implementation of the new rules.
The safest course of action is to be prepared to comply. If you think that telling your employees now (if you already haven’t told them) about likely payroll changes on Dec. 1 will lead to a smoother transition, if an injunction or summary judgment finding the rules unlawful is not issued, go ahead and notify them. Be prepared to go forward on Dec. 1—better safe than sorry. You can always go back and say, “Nevermind”. The consequences of not being ready to act on the new rules are too severe to gamble.
Adair M. Buckner, Attorney at Law, is Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization. Her other areas of practice include business law, business disputes, commercial litigation, estate planning, and probate. You can reach Adair at (806)-220-0150 or firstname.lastname@example.org, or by contact from her websitewww.adairbuckner.com. This material is not intended to be legal advice. The contents are intended for general information purposes only.