What’s Going on with the Final Rule Regarding Overtime Pay?

By Katherine Muniz
January 13, 2017

Employers across the nation were stunned when a federal judge issued an injunction blocking President Obama’s landmark legislation extending mandatory overtime pay to millions, one week before its December 1st start date.

Since the ruling was issued on Tuesday, November 22nd, little else has been reported, leaving employers nationwide wondering whether the rule will be axed permanently.

While the injunction is only a temporary measure to stall the regulation, the odds of the revisions taking effect are unfavorable. U.S. District Judge Amos Mazzant agrees with the 21 states and a coalition of business groups that challenged the rule as unlawful.

The opposing parties primarily argue that the “final” rule sidesteps the duties test that must be satisfied before an employee is eligible for overtime, and also raises the salary floor arbitrarily.

The judge agrees that the Labor Department does not have the authority to extend overtime based on salary levels alone — that doesn’t look good.  We asked several attorneys for their insight on the kind of factors that can impact the timing of the final ruling.

According to Employment Lawyer Matthew T. Fitzsimmons, of the law firm Nicola, Gudbranson & Cooper, “The U.S. Court of Appeals for the Fifth Circuit has put the case on an accelerated track. The briefing will conclude in late January, with oral arguments to follow. A decision could come out several months after oral arguments. After the Court of Appeals issues a final decision, the parties have 90 days to seek U.S. Supreme Court review.”

According to Employment Attorney J Bryan Wood, Founder of The Wood Law Office LLC, “Between now and then, it’s possible the trial court will decide the merits – upholding the regulation or formally striking it down. If that happens before the Fifth Circuit ruled, the appeal of that decision could be delayed further. So the litigation timing is extremely hard to predict.”

Additionally, Attorney Larry Carbo III, of Chamberlain Hrdlicka, comments that “While the parties’ briefing in the Fifth Circuit is scheduled to conclude in late January, we would not expect a ruling from the Fifth Circuit until weeks, possibly months, thereafter. This is significant given the viability of the rule under President-Elect Trump and his appointment of a new Secretary of Labor. The DOL’s liberal interpretation of the Fair Labor Standards Act is one of the issues at the heart of the issue on appeal now.”

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