By now you have likely seen news reports about a Texas judge enjoining the Department of Labor from implementing and enforcing the new overtime rules that were set to go into effect on December 1, 2016.  Here’s what happened and what to expect going forward.

What happened:

Earlier this year Kansas and several other states sued the Department of Labor in a Texas federal court claiming that the new overtime rules (which increased the salary threshold at which certain employees could be exempt from overtime requirements) were unlawful.  Yesterday the judge granted a nationwide preliminary injunction that prohibits the Department of Labor from implementing and enforcing those rules.  Preliminary injunctions are just that – preliminary.  However, given the standards that are applied in determining whether a preliminary injunction should be granted (including a “substantial likelihood of success on the merits” by the party requesting the injunction), they can be difficult, if not impossible, to overcome.  Interestingly, Kansas state agencies were cited in the opinion as evidence that the states would suffer irreparable harm if the rules were to go into effect.  You can read the opinion here:  https://www.texasattorneygeneral.gov/files/epress/Overtime_-_PI_Grant_(11-22-16).pdf?cachebuster%3A93=&utm_content=&utm_name=&utm_term.

What to expect:

Those new overtime rules you incorporated into your revised employee handbook?  The conversations you had with employees explaining how and why certain salary and payment structures were changing?  Given the court’s decision and prohibition on the Department of labor implementing and enforcing the new rules, you do not have to follow through with any planned changes to accommodate the new overtime rules – at least by December 1, 2016.  Your best bet is to stay prepared to implement changes but to wait to see how this develops before you do.  

If you have any questions about how this development may affect you and your business, please give one of our Employment attorneys a call.

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