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Posts tagged "Final Rule"

What Does the National Injunction on the Final Rule Mean for Employers?

A federal judge in Texas issued a preliminary injunction yesterday, November 22, 2016, that prevents the implementation of the Department of Labor's Final Rule regarding new overtime regulations. This preliminary injunction is nationwide and will affect all employers and employees who were subject to the Final Rule set to go into effect next week on December 1, 2016.

You can read more about the preliminary injunction on our blog here

You can also read more about the Final Rule on our blog here

So what does this mean for you as an employer?

If you have already made changes to an employee's salary or exempt status to comply with the Final Rule you should not change their salary or exempt status back. Doing so at this point without a final ruling will cause more upheaval and administrative costs. If upon the final judgment or other resolution the Final Rule is not implemented, employers who change salaries or statuses can move employees back into their original positions under the 2004 legislation with the comfort of knowing that they have the final answer.

If you have not made changes to an employee's salary or exempt status yet but do have employees who would be affected by the Final Rule, you don't have to make any changes now. Instead continue planning and be ready to make any necessary modification to comply should the preliminary injunction be lifted or a final resolution implement the Rules.

All employers should continue to plan and look for updates on the matter. The preliminary injunction is just that - preliminary. The litigation will continue, the DOL will challenge the preliminary injunction and there must be a final judgment or other resolution amongst the parties. In the meantime, the preliminary injunction will stand and the current salary threshold of $23,660 will be in effect. If the States Plaintiffs prevail it is possible that the preliminary injunction could become permanent, that is the Final Rule will never be implemented and the current threshold will remain. However, if the States Plaintiffs fail to prove their case, the Final Rule could be implemented swiftly. The parties could also reach another resolution or the new presidential administration could intervene and propose a modified Final Rule. If such intervention occurs, resolution is unlikely in 2017.

This is a good time for all employers to evaluate all workers and their statuses. Employers can be investigated, fined and can incur civil costs for inadvertent overtime violations as well as misclassification of employees and independent contractors. If you have questions regarding the Final Rule or other employment matter please contact Kisner Law Firm

Federal Judge Prevents Implementation of DOL Final Overtime Rule

On November 22, 2016, a Texas federal judge issued a nationwide preliminary injunction which prevents the Department of Labor's new overtime rules, known as the Final Rule, from taking effect on December 1, 2016.

The Department of Labor's (DOL) Final Rule would have doubled the exemption threshold for overtime pay from $23,660 a year to $47,476 for most salaried workers. The change would have required most businesses and many nonprofit organizations to pay time-and-a-half for more than 40 hours per week by those employees making less than $47,476 per year.

However, U.S. District Judge Amos Mazzant found that the State Plaintiffs, a group of states that did not include Pennsylvania, met their burden for a preliminary injunction to stop the Final Rule from going into effect next week.

The Court held that the statute under which the "white collar" salary exemption comes, is plain and unambiguous, and that it is Congress, not the DOL, who has the ability to make the changes laid out in the Final Rule. The Court also held that the Final Rule made a "de facto salary test" that is at odds with Congress' intention and exceeds the DOL's authority.

One of the questions that must be answered in issuing a preliminary injunction is if the injunction is in the public's best interest. Judge Mazzant held that if the State Plaintiffs proved their case, the implementation of the Rule, and the subsequent need to undo it, would greatly harm the public- particularly by costing the public, including the States, millions. Whereas, if the Defendants show the Final Rule is lawful and it is eventually implemented then there would be no harm caused by the injunction, only a delay, during which the current rules would apply. The Court also found that because the Final Rule would affect employers and employees in all states a nationwide enjoinment was necessary.

For assistance with overtime or other employment issues contact Kisner Law Firm.

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