FLSA Injunction Leaves Employers Wondering: What’s Next?
Hear that fluttering sound? That’s the sound of thousands of employers blinking their eyes in disbelief.
A federal judge’s decision to block the Department of Labor’s new overtime rule has left countless employers shocked. Some are relieved, some are exasperated, but nearly all share in a pervasive sense of uncertainty: What happens next?
The DOL’s proposed rule, which many analysts assumed would pass without a hitch on December 1st, seeks to revise overtime pay requirements and classification under the Fair Labor Standards Act. The rule would have made numerous “white-collar” employees eligible for overtime, while increasing minimum salary and annual compensation thresholds for exempt employees every three years.
Various organizations contested the rule, railing against the excessive costs of its implementation (estimated between $1 million and $30 million), challenging the Department’s jurisdiction and calling for an injunction. To that end, 21 states filed an emergency motion to block the rule last month.
Now that the federal court has sided with the states, where does that leave the FLSA? In short, overtime requirements will not change this Thursday as they were once expected to.
However, that doesn’t mean employers are off the hook. The injunction is a preliminary and temporary one. The court will continue to review and weigh the facts of the case, and make a ruling… sometime soon. The fact is that legal experts don’t know when the court will issue its final determination, if this action foreshadows its ultimate decision, or whether the incoming Congress or the Trump administration will take things into their own hands.
For these reasons, and in light of the significant efforts of rolling a decision back (not to mention the possible employee indignation following an unexpected change to overtime policy), organizations may not want to stray from their intended plans of action this Thursday. Nonetheless, employers who waited to address new federal overtime requirements until the law was only a week away can enjoy the once-in-a-lifetime benefits of procrastination.
This injunction goes to show that nothing is impossible when it comes to federal regulations—and the court’s decision is far from the most surprising event in a year of historical upsets. Who knows what the future will hold? With a month left in 2016, my money’s on Santa Claus being real.