DOL Issues Response to Recent Injunction Over Overtime Final Rule
Earlier today, the United States Department of Labor issued a written public response on its website to the injunction issued by Judge Mazzant enjoining the enforcement of its Overtime Final Rule, that was set to become effective on Thursday. The DOL response is set forth below and stated:
"On November 22, 2016, U.S. District Court Judge Amos Mazzant granted an Emergency Motion for Preliminary Injunction and thereby enjoined the Department of Labor from implementing and enforcing the Overtime Final Rule on December 1, 2016. The case was heard in the United States District Court, Eastern District of Texas, Sherman Division (State of Nevada ET AL v. United States Department of Labor ET AL No: 4:16-CV-00731). The rule updated the standard salary level and provided a method to keep the salary level current to better effectuate Congress's intent to exempt bona fide white collar workers from overtime protections.
Since 1940, the Department's regulations have generally required each of three tests to be met for the FLSA's executive, administrative, and professional (EAP) exemption to apply: (1) the employee must be paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed (“salary basis test”); (2) the amount of salary paid must meet a minimum specified amount (“salary level test”); and (3) the employee's job duties must primarily involve executive, administrative, or professional duties as defined by the regulations (“duties test”). The Department has always recognized that the salary level test works in tandem with the duties tests to identify bona fide EAP employees. The Department has updated the salary level requirements seven times since 1938.
The Department strongly disagrees with the decision by the court, which has the effect of delaying a fair day's pay for a long day's work for millions of hardworking Americans. The Department’s Overtime Final Rule is the result of a comprehensive, inclusive rule-making process, and we remain confident in the legality of all aspects of the rule. We are currently considering all of our legal options."
Other than stating that it is not happy with the injunction and disagrees with it, the DOL response provides little guidance as to what it intends to do about it, if anything. They make no comment about whether the DOL will file a motion for reconsideration or seek appellate review. This may be because of the timing and election cycle. It is likely that whoever President-Elect Trump picks to become his Secretary of Labor will have a different view of the Overtime Final Rule regulations than current Labor Secretary Perez. Given the lame duck status of the current Labor Secretary, it is very difficult to predict how this will all come out and employers should make sure they are proceeding carefully with the advice of experienced counsel in deciding how they will handle the current uncertainty regarding these regulations and their future.