Court Temporarily Blocks Overtime Rule

Court Temporarily Blocks Overtime Rule

On Tuesday, November 22, 2016, a Federal Court issued a preliminary injunction to temporarily block the U.S. Department of Labor (DOL) from implementing and enforcing its Final Overtime Rule nationally, pending further order by the court.
The court has issued a preliminary injunction preventing the rules from being implemented on a nationwide basis:
  • As a result of this ruling, employers currently do not need to comply by the original December 1 effective date.
  • The injunction is temporary pending further review by the courts.
If you have already made alterations to your compensation plans or to your employees’ exemption status, it might be unpopular to reverse course now. Although you may have the legal right to revert to the status quo depending on your circumstances, you might consider waiting until a final decision is reached in court, Congress, and the White House before doing anything further.
If you had been waiting until December 1 to implement the changes, you have the option of holding off and awaiting a final decision by the courts on the official changes. You might consider communicating to your workforce that the expected changes are going to be delayed given the court ruling, and let them know that you will continue to monitor the situation and make adjustments when and if appropriate.
Please refer to our previous notice regarding the overtime pay changes to see how this will affect your employees Changes to Overtime Pay Original Article. For any questions or concerns please contact our team of tax professionals.

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