• Honkamp Krueger HK-Logo
  • HKPHKP-Logo
  • HK Financial ServicesHKFS-Logo
  • HKFS Retirement ServicesHKRS-Logo
  • HK Alliance HKA-Logo

FLSA Overtime Rule in limbo: what’s next?

News | , , , |

**Update: On January 3, 2017, the federal government’s motion to halt a lawsuit from 21 states and the U.S. Chamber of Commerce that challenged new overtime regulations, was denied by a district court in Texas. The motion requested a hold on the lawsuit to await the 5th U.S. Circuit Court of Appeals ruling on the government’s earlier appeal of the preliminary injunction blocking the rule. Conversely, the states and chamber are seeking a motion for summary judgment and permanent injunction in their favor while the appeal proceeds. The new presidential administration will likely also have an effect on the outcome. ***

On November 22, a Texas federal judge supported the preliminary injunction of the new Fair Labor Standards Act’s (FLSA) overtime rule which was to go into effect on December 1, 2016. A preliminary injunction is only temporary but halts the proposed changes to the FLSA overtime rule. For now, this means that the current FLSA overtime rules remain in effect until a permanent decision has been reached.

The 21 states who filed the emergency motion claimed that the Department of Labor (DOL) surpassed its authority with proposing too high of a salary threshold and invoking automatic adjustments to the threshold.

The DOL is standing by the rule as proposed and will likely challenge the decision. There are talks about another hearing on November 28, but as of this release, this has not been confirmed.

What does this mean for employers? Hold tight. If you have communicated changes, now is not the time to have the discussion about any type of adjustment. If you have not yet communicated the changes, you will do well to hold off for the time being.

You will see experts advising on both sides of this situation, but preparation still remains your best defense. Supporters believe this is a last ditch effort to reverse. Opponents believe they now have the momentum in play to block the changes.

We will keep you posted with updates as they become available.