Overtime Rule Blocked

On Tuesday, November 22, a federal court blocked implementation of the “overtime rule” that would have made an estimated 4 million more American workers eligible for overtime pay starting December 1.

The U.S. District Court in the Eastern District of Texas granted the nationwide preliminary injunction that prevents the Department of Labor from implementing the changes while the regulation’s legality is examined. A total of 21 states had sued the agency to block the rule before it took effect.

 

What does this injunction mean for employers?

For now, businesses have a reprieve in implementing the changes outlined in the overtime rule. While this injunction is in effect, employers are not required to pay overtime in accordance with the new rules. However, the injunction is only temporary. It is too soon to determine whether the regulation will be upheld and implemented at a later date, or whether it will be permanently blocked.

The preliminary injunction may be too late for many employers. If you have already gone through the process of identifying workers affected by the final rule and made alterations to your compensation plans or your employees’ exemption status, the timing of this preliminary injunction is going to create new challenges.

There are many aspects of this temporary injunction that will impact employers and their employees. We will continue to keep you updated on news about this ruling and how to manage changes you may have made in anticipation of the ruling going into effect December 1.

 

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