Obama Administration Overtime Rule Declared Invalid
On Friday of last week in the state of Texas, a federal struck down an Department of Labor final order issued under the Obama Administration regarding overtime and declared it to be invalid. In an article that appeared on the SHRM website, the order would have made more than 4 million exempt employees eligible for overtime pay.
U.S. District Court Judge Amos Mazzant granted a summary judgement to more than 55 plaintiffs consisting of both states and business groups which challenged the legality of the Obama Administration’s rule issued in 2016. These groups asserted that the Obama Administration exceeded its authority in requiring that the minimum salary for employees to be considered to be exempt be nearly doubled from $23,660 to $47,476. The court agreed with the plaintiffs. Judge Mazzant stated that the DOL ignored Congress’s intent with the overtime final rule and that the new rule in essence had invalidated current regulations. Due to this latest ruling, the current regulations will stay in place for now.
It is possible that Judge Mazzant’s ruling on Friday will be appealed. However, even if it were to be appealed, the issue would likely not be resolved until much later. The current Secretary of Labor, Alex Acosta, who was appointed by President Trump, has promised during his confirmation hearings before Congress that he would be reviewing the rule and that the Trump Administration would be working with the Department of Labor to revise the rules. Industry experts have indicated that any changes made under the Trump Administration would not be nearly as extreme as those that had been put forth by the previous administration.
The good news for employers is that they are not required to make any changes to their payroll because of the ruling that was issued by Judge Mazzant on August 32st. According to Alexander Passantino, an attorney with Seyfarth Shaw located in Washington, D.C. This ruling is to be considered final and replaces a temporary injunction that was issued in November of last year leaving the salary threshold for exempt employees of $23,660 that was put in place in 2004 in effect. Secretary Acosta acknowledges that this needs to be raised, but not quite so significantly.
It’s easy to become confused when dealing with such issues surrounding employee pay, compliance and other issues surrounding compensation for workers – especially in terms of federal regulations. If you are at all confused about how such changes can affect your organization, one of the best approaches is to have an experienced team that specializes in HR management there to help. This is just a part of all of the things that we do for small and medium sized companies at EinsteinHR.
Our company is committed to providing every aspect of human resource service and management above and beyond what our clients expect. EinsteinHR along with our alliance partners will provide all areas of service in order to help you in your HR and PEO decisions. Contact us today at 888-981-3622 (emc2) to find out how we can help.