Back in May, employers here in Tennessee and across the U.S. began scrambling to make the necessary adjustments after the U.S. Department of Labor announced that it was issuing new overtime rules that, once implemented on their December 1 deadline, would increase wages and earnings for an estimated 4.2 million workers.
Specifically, the rule changes called for a near doubling of the longstanding salary threshold for overtime pay from $23,600 to $47,476, such that any employee who earned less that this amount would have to be paid time-and-a-half for working over 40 hours per workweek.
Given the magnitude of this overtime shift and the preparations it has necessitated over the last six months, employers throughout the nation were understandably confused last Tuesday to learn that a federal judge in Texas had granted a preliminary injunction against the rule, meaning the salary threshold for overtime pay will remain at $23,600.
In other words, the new rule won't be taking effect tomorrow or for the foreseeable future.
Indeed, the preliminary injunction, which was sought by 21 states and the U.S. Chamber of Commerce, must now become an official injunction, a process requiring more hearings within the next 60 days.
It's highly likely that during this time, DOL attorneys will decide to appeal the issuance of the injunction to the U.S. Court of Appeals for the Fifth Circuit, which would have jurisdiction over the matter. This appeal, however, could take months even on an expedited basis, and experts indicate that even though this appellate court is a less than friendly venue for the Obama Administration, there's still a chance it could overturn the lower court.
This essentially means that employers will continue to be left in something of a legal limbo, with those who have neglected to do anything up to this point able to maintain their current position, but also be prepared to act quickly should the higher court rule in favor of the overtime rule.
Conversely, those employers who have been proactive will have to decide whether to keep changes in effect until they hear otherwise or simply revert to their prior employee compensation structure.
Stay tuned for updates ...
If you are an employer who would like to learn more about your overtime obligations or an employee with concerns over possible wage and hour violations, consider speaking with a skilled legal professional.