Judge Freezes Department of Labor's New Overtime Rules: Now What?

A Federal District Court Judge out of the Eastern District of Texas issued a nation-wide temporary injunction halting the Dec. 1 implementation date of the Department of Labor's new overtime rules. Because this is a temporary order, employers have been left wondering what impact it may have on their organization.

No final decision has been made regarding the new overtime rules.

How did this happen?

Twenty-one states sued the Department of Labor in Federal Court, arguing that various provisions of the new overtime rules were unlawful and/or beyond the scope of the Department of Labor and asked the court to freeze (enjoin) implementation of the rules while the lawsuit proceeds. The judge agreed and issued the injunction - ordering that the injunction applies nationwide rather than just in the 21 states who sued.

What does this mean?

Until the temporary injunction is modified or lifted, the DOL's new overtime rules will not be implemented. At this point, there is no estimated time line for when the rule will either be implemented or be struck down as unlawful.

How does this impact me?

Given the uncertainty and volatility this injunction has caused, organizations should proceed carefully. If you have already implemented the new overtime rules, we caution against rushing to reverse those changes without careful consideration of several factors:

  1. The fight is not over. Sitting tight and carefully monitoring the situation may save you from compliance whiplash in which you reverse course on implemented changes and then have to re-implement changes going forward. The injunction may be appealed prior to December 1st. Until we get more information about what is happening in that lawsuit, staying the course is likely the wisest course of action.
  2. Non-monetary impacts. Employee communication and employee morale are significant strategic considerations every organization should keep in mind as it considers whether to reverse wage increases or other compensation changes made to comply with the new rules. Having a sound strategy for reversing implemented changes will be important for employee/employer relations - and that requires time, thought, and strategy.

Best practice if you've already implemented changes: wait and watch, for now.

If you have not yet implemented changes, we recommend you remain fully prepared to implement those changes by December 1st but wait on actually implementing those changes.

Our Employment Group is always willing to assist in finding the solution that is best for your organization. You can reach Ron or Melinda at 320-200-4928.

This article is made available for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By reviewing this article, you understand that there is no attorney client relationship between you and the attorney. This article should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

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