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Overtime Rules Stay the Same as New Regulations are Held up on Appeal

By Peter R. Rosenzweig

Our previous alert on the topic of overtime focused on the U.S. Department of Labor’s (“DOL”) new regulations concerning employee eligibility for overtime pay.

In 2016, the DOL changed the regulations for overtime pay by increasing the minimum annual salary employees have to be paid in order for employers to avoid paying those employees for overtime work. More specifically, under the new regulations an employee has to be paid a minimum annual salary of $47,476  (up from $23,660) to be “exempt” and, therefore, ineligible for overtime compensation for hours worked in excess of 40 per workweek.  Conversely, an employee who is paid an annual salary less than $47,476 cannot be “exempt” and will be eligible for overtime pay.

These new regulations were to become effective on December 1, 2016. Just days before December 1st, however, in a case filed in Texas by 21 states fighting the DOL on the new regulations, the trial court judge granted a preliminary injunction which has blocked their implementation.  Not surprisingly, the DOL immediately appealed that ruling and is seeking to have the appellate court overturn the trial court’s decision to grant the preliminary injunction.

Though the DOL’s appeal had been filed, the plaintiffs in the case (i.e., the 21 states) filed a motion for summary judgment in the trial court seeking to have the injunction made permanent.  Also, the AFL-CIO union filed a motion to intervene in the case as an additional defendant along with the DOL.  Like the DOL, the AFL-CIO wants the new regulations to become effective so more employees across the country, who are not currently eligible for overtime pay, can become eligible and see increases in pay.

Shortly thereafter on December 12th the DOL filed a motion to stay (or pause) any proceedings in the trial court while the appeal process is pending.  On January 3, 2017, as one could expect, the trial court judge (i.e., the same judge who granted the injunction) denied the motion so the proceedings in that court will continue and both of the aforementioned motions can be ruled upon while the appellate court is reviewing and ruling on the DOL’s appeal.  All of the parties must submit their briefs in the appellate court by January 31, 2017.  There’s no telling when the appellate court will issue its opinion.

Our employment attorneys will continue to monitor the case and provide immediate notifications of any developments. For now, all overtime rules and regulations as of November 30, 2016 remain in effect.