Partner Jay M. Wallace is quoted in the Dallas Business Journal article titled, “Why the expanded overtime rule is unlikely to ever take effect.” The piece explores the future of the Obama administration U.S. Department of Labor (DOL) expansion of overtime eligibility regulation – making eligible workers earning up to $913 a week, or $47,476 a year, and setting a readjustment of the earnings threshold every three years to reflect changes in average wages. The regulation recently suffered two setbacks: 1) on November 22 Judge Amos Mazzant of the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction barring it from taking effect on its enactment date of December 1; and 2) a presumably-opposed Donald Trump was recently elected U.S. president.
Wallace offered his perspective on several aspects of the recent developments involving the overtime expansion regulation:
On the impact of the incoming Trump administration:
I think that the new Trump administration was going to probably take this rule on after January anyway. The Trump folks don’t like this rule and they want it undone.
On the issue of employers who had already changed their pay scales in anticipation of the regulation taking effect:
Unwinding it once it’s done, unringing that bell, could be difficult. Imagine you tell somebody that you’re going to raise their salary to $47,000, and then after January say, ‘Oh wait, nevermind.’
On the impact of the nationwide preliminary injunction being issued prior to the regulation’s enactment:
If this rule had gone into effect, even if the new administration had made a change, putting that genie back in the bottle would have been very hard. The fact that this happened at this time is just an incredible boon for employers.
Wallace noted that the appeal process for the DOL is to take the case to the U.S. Court of Appeals for the Fifth Circuit, a move they have since done. He notes that in the near term, that court is unlikely to reverse Mazzant’s injunction – moving the calendar closer to the date when the Trump administration takes office and probably abandons the federal government’s push for the regulation.
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Jay M. Wallace