Last week, a Texas U.S. District Court judge issued a nationwide injunction preventing the implementation of the Department of Labor’s (DOL) “Overtime Rule” previously set to take effect on December 1. This means the rule will not go into effect on December 1, not that it will never go into effect.
The court found that the DOL had likely exceeded its statutory authority in setting a salary threshold higher than necessary to exempt “any employee employed in a bona fide executive, administrative, or professional capacity.” Because the current salary threshold increase was unlawful under the plain meaning of the statute, the DOL “also lacks the authority to implement the automatic updating mechanism.”
While the DOL is likely to appeal the decision, the timing is such that the fate of the overtime rule is now in the hands of the 115th Congress and the incoming Trump administration.
Here is a blog post from OMA Connections Partner, Frantz Ward, on the situation.
The National Association of Manufacturers (NAM) will advocate with policymakers in Congress and on the transition team about the excessive costs to implement the rule, which it estimates at $24 billion over the next 10 years. The NAM issued this press release on the decision. 11/28/2016