New to HR? Templates, tools and development to make you a seasoned pro in no time.
Shawn Premer shows how doing the right thing for employees leads to positive business results.
Is your employee handbook keeping up with the changing world of work? With SHRM's Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Build competencies, establish credibility and advance your career—while earning PDCs—at SHRM Seminars in 12 cities across the U.S. this spring.
#SHRM18 will expand your perspective – on your organization, on your career, and on the way you approach HR. Join us in Chicago June 17-20, 2018
Members may download one copy of our sample forms and templates for your personal use within your organization. Please note that all such forms and policies should be reviewed by your legal counsel for compliance with applicable law, and should be modified to suit your organization’s culture, industry, and practices. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRM’s permission. To request permission for specific items, click on the “reuse permissions” button on the page where you find the item.
[Editor's note: A federal district court has granted a preliminary injunction blocking the overtime rule from taking effect Dec. 1.]
A Nov. 16 hearing on whether the
overtime rule should be temporarily barred shouldn't prevent employers from complying with the rule by its scheduled effective date—Dec. 1.
While the U.S. District Court for the Eastern District of Texas is expected to issue a decision soon—probably Nov. 22—on the motion for a nationwide injunction to delay the rule's implementation, "Businesses should be prepared to comply with the regulation as written given the approaching effective date," said Jim Swartz, an attorney with Polsinelli in Atlanta.
"Judge [Amos] Mazzant, the President Obama-appointed presiding United States district judge, reportedly said during the hearing today that he will not consider what the president-elect [Donald Trump] will do with the rule; he is focused on the legality of the regulation before him," Swartz added.
The 21 states challenging the overtime rule argue that the Department of Labor (DOL) did not have the authority under the Fair Labor Standards Act (FLSA) to set a salary level for exempt employees, noted Wendy Stryker, an attorney with Frankfurt Kurnit Klein & Selz in New York City. The exempt salary threshold more than doubled from $23,660 to $47,476.
[SHRM members-only toolkit:
Calculating Overtime Pay in the United States]
The states also maintained that the revised rule's automatic triennial increase violated the Administrative Procedure Act's notice-and-comment regulations. And they maintain that the rule violates the 10th Amendment by invading states' sovereign authority to enter into employment agreements, Swartz said.
The business groups suing over the rule, led by the U.S. Chamber of Commerce, argued that the degree of the increase violated the FLSA, rather than challenging the DOL's authority to raise the salary-level threshold. Like the states, the groups also maintained that the automatic increase was unlawful.
The states are seeking an emergency motion to temporarily prevent the rule from taking effect. The business groups asked for an expedited ruling on their claims that the department exceeded its authority.
The lawsuits have been consolidated.
While the states' motion for preliminary injunction was heard today, the court also has scheduled, if necessary, a hearing for Nov. 28 on the business groups' expedited summary judgment motion.
A ruling on the preliminary injunction motion is expected by Nov. 22, according to Steven Whitehead, an attorney with Taylor English in Atlanta. If the motion is denied, there will be the hearing on Nov. 28, he noted.
"An injunction is an extraordinary remedy, and the standards which must be met are quite high," said Tim Garrett, an attorney with Bass Berry & Sims in Nashville, Tenn. "Thus, I do not believe the court will grant the injunction requested."
But Whitehead described the chances of an injunction being issued as "a coin flip." He said, "Salary alone cannot be a basis for a determination on exempt status. That is in effect what the salary test adopted by the DOL has done." But, he added, "The DOL enjoys significant deference in its interpretation of the FLSA."
For more overtime compliance news, tips and tools, check out the SHRM resources provided below:
The new regulations are arguably contrary to the FLSA because they exclude large numbers of people Congress intended to include within the scope of the executive, administrative and professional exemptions, noted Paul DeCamp, an attorney with Jackson Lewis in Reston, Va.
"The conventional wisdom is that the attack on the triennial indexing is the strongest legal argument," said Robert Boonin, an attorney with Dykema in Detroit. "But if that turns out to be the court's primary concern, then an injunction is unlikely since that issue won't surface for another three years." On the other hand, he said an injunction might be issued on the states' constitutional issues alone.
Courts can be unpredictable, though, and if the court does rule in favor of the business groups challenging the rule, the rationale may be because the court thinks that it would be "extremely difficult for businesses to roll back their actions taken to conform to the new regulations," Boonin observed. Still, while judicial relief is "possible," he added, it is "far from assured."
Alfred Robinson Jr., an attorney with Ogletree Deakins in Washington, D.C., agreed, saying that how the court will act is "next to impossible to predict."
Keep Compliance a Priority
Boonin recommended that employers "keep their feet on the gas pedal and prepare for the regulations to become effective on Dec. 1." He added that if employers act as if judicial relief will occur and it doesn't, they will have to rush to conform, "and rushing will mean that mistakes will be made or details will be missed."
Garrett agreed, saying, "We would advise that employers continue to plan to comply with the new rule effective Dec. 1, unless the court does impose a nationwide injunction." He added, "The risks of failing to comply are simply too great and can lead to immediate legal exposure."
Was this article useful? SHRM offers thousands of tools, templates and other exclusive member benefits, including compliance updates, sample policies, HR expert advice, education discounts, a growing online member community and much more.
Join/Renew Now and let SHRM help you work smarter.
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Please sign in as a SHRM member before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
Talent Attraction Study: What Matters to the Modern Candidate
SHRM Member Discounts Program
SHRM’s HR Vendor Directory contains over 3,200 companies