When we last saw the Department of Labor’s overtime rule, a federal judge in Texas had blocked it, granting 21 states’ request for a preliminary injunction. Now, 9 months later, the rule appears to be dead in the water.
On August 31, the same district court that issued the injunction declared the rule unconstitutional and invalid. What’s more, the DOL has dropped its appeal, indicating that the rule will not become reality. The rule would have made millions of previously-exempt employees eligible for overtime pay under the Fair Labor Standards Act. It was scheduled to go into effect on December 1.
However, in true Game of Thrones fashion, the brutal defeat of the FLSA overtime rule may have dramatic consequences for its would-be vanquishers. Federal overtime standards still need to be updated—the question is who will do it, when, and to what extent the changes will impact employers. The Washington Examiner reports:
“The Obama administration’s effort to rewrite the federal rule covering overtime, while dead, is likely to succeed in one respect: It is forcing the Trump administration to do its own update of the rule. Observers on both sides agree that will almost certainly force the Trump White House to expand the number of people covered by the overtime rule, even if it doesn’t go as far as former President Barack Obama wanted.”
For now, although many organizations have already started complying with the erstwhile new rule, employers do not have to change their compensation practices. Nonetheless, it might be a great time to make sure all your employees are properly classified and paid in accordance with federal law.
We’ll make sure to keep you updated on any further developments in this saga. With all the changes thus far, who knows what could happen in the next few weeks and months? Winter is coming, after all.