More Overtime or Not?

December 12, 2016

The table is set for a fight over whether or not more employees will be eligible for overtime pay as a result of the Department of Labor regulation changing the qualifications to be an exempt employee.  President-Elect Trump has nominated Andrew Puzder to serve as Secretary of the Department of Labor.  He has made it clear that he opposes the changes to the overtime exemption requirements that would expand the number of employees eligible for overtime pay.  On the other side, the Fifth Circuit Court of Appeals agreed to accelerate the appeal by the Department of Labor of the injunction blocking the implementation of the revised overtime rule for white collar exemptions.  Briefing on the appeal will be done by the end of January, opening the door for a court decision as Mr. Puzder takes office.

Mr. Puzder could order the Department to stop working on a brief to the Fifth Circuit Court of Appeals when he takes office, but that may be after the Department of Labor has submitted its brief in support of the revised overtime rule.  It will be difficult to “unwind” something that has been processed by the Fifth Circuit Court of Appeals.  Of course, the Fifth Circuit Court of Appeals could reverse the Federal District Court decision, but then the new Department of Labor Secretary could take steps to delay any enforcement proceedings against a company that did not comply with the overtime pay requirements and salary adjustments

Employers are put in a very difficult position by this anticipated controversy over whether or not the revised overtime rule should be implemented.  Many companies have already proceeded to increase the salary of certain employees based upon promises made during the course of discussions on this topic over the past year.  Other employers have placed everything on hold to see how this controversy unfolds.  There is no correct answer to what steps to take and much depends upon the “culture” that an employer wishes to maintain in their work setting.

Everyone needs to continue to monitor this situation as there can be many twists and turns over the next several weeks.

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