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Uncertainty lingers after injunction puts overtime rule on hold

In our previous post, we spent some time discussing how many business owners across the nation were bracing themselves for the December 1 implementation of the U.S. Department of Labor's new overtime rule, which essentially called for doubling the annual overtime salary threshold to $47,476 and, by extension, a major expansion of the pool of workers eligible for time-and-a-half.

We also discussed how business owners were wondering what the fate of the rule would be once President-elect Donald Trump took office on January 20. Fast forward to the present, however, and the matter has only become even more unclear thanks to the decision of a federal judge. 

Prior to the December 1 deadline, 21 states and the U.S. Chamber of Commerce filed a lawsuit in the District Court for the Eastern District of Texas seeking to prevent the new overtime rule from taking effect, arguing, among other things, that the Obama Administration had exceeded its authority and that it would be unduly burdensome to business owners.

These arguments appear to have been persuasive, as the presiding judge issued a preliminary injunction to stop the rule less than a week before it was scheduled to take effect.

In recent developments, the DOL has filed a notice of appeal with the Texas federal court, meaning they will be asking the New Orleans-based Fifth Circuit Court of Appeals to review the issuance of the preliminary injunction on an expedited basis.

As to why the DOL is seeking an expedited review, experts indicate that it has everything to do with the fact that an appellate court can take months to issue a ruling on the decision of a lower court, meaning this case likely wouldn't even be decided -- let alone heard -- until well after the inauguration.

Many of these experts, however, are uncertain as to whether the request for an expedited review will be granted, particularly if the DOL's only argument is that the impending administration change should make this case a priority.   

If the 5th Circuit does indeed deny expedited review, many are saying it would likely signal the end of the overtime rule, as it's highly likely that the DOL, acting under the new administration, would elect not to continue defending the rule in court and essentially withdraw the appeal.

All this uncertainty naturally has business owners wondering what to do. According to many experts, it would perhaps be prudent for employers to remain on whatever course they've taken up to this point -- compliance or non-compliance with the overtime rule -- and wait until the matter is effectively resolved before planning their next move.

Stay tuned for updates …  

Consider speaking with a skilled legal professional if you have questions about the new overtime rule, or would like to learn more about your responsibilities as an employer.

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