The New Overtime Rule May Never Take Effect-But Don’t Relax Just Yet
Will the U.S. Court of Appeals for the Fifth Circuit allow the new overtime rule to go into effect? If it does, how long will it take for President-elect Trump and the Republican-led Congress to stop the rule? And what should employers do in the meantime?
On November 22nd, a federal judge in Texas issued a temporary injunction against the U.S. Department of Labor ("DOL"). That injunction prohibits the DOL from enforcing the new overtime rule. As expected, the DOL has filed an appeal with the U.S. Court of Appeals. A few days ago, the DOL also filed a motion with the appellate court seeking an expedited review of its appeal. This motion seeks to shorten the time for each side to file its written arguments with the court, so that the court can quickly proceed to consider the case and issue its ruling.
Even if the appellate court grants the motion, it is very unlikely the court will hold hearings or issue its decision before the inauguration on January 20th. Moreover, there is no assurance that the court's decision will be favorable to the DOL - or that a favorable decision would not be quickly mooted by Congressional action.
Given the slim odds of the new overtime rule going into effect, many employers are just going to keep doing business as they always have. Others are asking those exempt employees who would be affected by the new overtime rule to keep track of their time; that will enable the employers to accurately calculate overtime should the new rule actually go into effect.
While either position is reasonable, employers should also realize that all of the media attention to the new rule has undoubtedly made some employees question whether they are properly classified as exempt and whether they should be receiving overtime under the current rule. Those questions could lead to DOL investigations or lawsuits.
Now is a good time for employers to take a look at every exempt employee's job duties and to ascertain whether the employee qualifies under one of the existing overtime exemptions. Job duties can change over time. Employers may discover that some exempt employees should be non-exempt - and vice versa. It is better for employers to make that discovery sooner rather than later.