In the aftermath of President-elect Trump’s victory, many
employers are wondering how the president-elect’s priorities will impact their
employment and labor law obligations. One immediate question on employers’
minds is whether they still must comply with the Obama administration’s new
federal overtime pay rules set to go into effect on December 1, 2016. It is
highly unlikely that there will be any activity related to these rules by
President-elect Trump prior to the December 1 deadline, although a later
retraction or retrenchment of the rules is certainly possible. Employers
should, however, stay tuned to a legal challenge to the new rules currently pending
in federal district court in Texas. The judge in that action, Judge Amos L. Mazzant,
III, has announced that he will rule by November 22, 2016, on a pending motion
to enjoin the U.S. Department of Labor’s enforcement of the new rules. If the
court grants the motion and issues a nation-wide injunction, implementation of
the new overtime pay rules may be delayed. However, because the court could also
deny the motion or limit the reach of any injunction, employers should continue
preparing for the December 1 deadline.
The legal challenge to the new overtime rules began earlier
this fall when 21 states and a number of business groups sued the U.S.
Department of Labor in federal district court in Texas in two separate cases
that have been consolidated. This week, the court heard oral argument on the
plaintiffs’ motion requesting an injunction barring implementation of the new
rules. Among a number of arguments, the plaintiffs allege that the U.S.
Department of Labor has exceeded its legal authority in issuing the new rules and
providing for automatic salary threshold increases in the future. The
plaintiffs also argue that the extraordinary measure of injunctive relief is
necessary to halt the rule and preserve the status quo until the court can
fully hear the merits of the case.
We here at GPM will be continuing to follow the Texas case
and will provide an update when the court rules next week. In the meantime,
employers should continue to prepare to comply with the new rules, given that
the December 1 deadline may hold.
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