Federal Judge Blocks Implementation Of Overtime Regulations

On November 22, East Texas Federal Judge Amos Mazzant granted a preliminary injunction delaying the implementation of the Department of Labor’s (DOL) overtime rule, which had been slated to go into effect on December 1. The Fair Labor Standards Act's (FLSA) new overtime requirements would have raised the maximum salary employees could earn, from $455 per week to $913, while still qualifying for mandatory overtime pay.

Mazzant’s motion was granted at the request of 21 states, the U.S. Chamber of Commerce and several other like-minded organizations. PPAI has lent its support to bipartisan legislation that would delay and provide relief for the new rules. In his opinion, Mazzant wrote that the DOL “exceeds its delegated authority and ignores Congress's intent by raising the minimum salary threshold such that it supplants the duties test.”

In an update to its latest SBLC Report, the Small Business Legislative Council (SBLC) offered its analysis of Mazzant’s ruling and what it likely means for the future of the new overtime rules.

The update stated, “Although the government argued that the injunction should only apply in those states involved in the case, Judge Mazzant rejected this approach and instead issued the injunction nationwide (which he has the authority to do as a federal judge).”

The update also states:

“As to the temporary injunction itself, prior to the case being concluded, there are two ways that the temporary injunction could be lifted. First, Judge Mazzant could lift the injunction. However, given the language in his decision, this seems unlikely. Second, the Fifth Circuit Court of Appeals, on an appeal by the government, could overturn the temporary injunction. Given the Fifth Circuit’s conservative swing this too is unlikely. It is more likely that the case will continue on its current course, which could result in a final decision that the DOL lacked the authority to promulgate the regulations which would then be subject to an appeal and could drag on for a long time.

“Thus, it now looks likely that the overtime rules will not go into effect before Donald Trump becomes president. As we previously reported, had the rules gone into effect as scheduled on December 1, the rules would have been in effect for almost two months before Trump took office, which might have made them politically unpalatable for the new Administration to change, particularly given Trump’s populist base of support.

“Now that the rules have been stayed we may see the new Trump Administration be more aggressive about engaging in the notice and comment process to change or repeal the rule or pushing for legislation to do the same (though such legislation would need bi-partisan support to overcome a filibuster in the Senate).

“There is also still the slight chance that the regulation could be subject to review and disapproval under the Congressional Review Act (CRA). As we discussed in our last report, the overtime rules were issued on May 23, before the estimated May 31 cut-off date for regulations that may be subject to review and disapproval under the CRA. The latest report from the non-partisan Congressional Research Service is now estimating a May 30 cut-off date. However, the overtime rules are still technically on the list of regulations that might be subject to CRA disapproval because the 60 legislative days that must pass before a regulation is out of the CRA window haven’t passed yet for the overtime rules.

“On Friday, we attended a meeting with Speaker Ryan’s Chief of Staff, David Hoppe. Mr. Hoppe indicated that they are very mindful of the CRA calendar and will be trying to wrap up the lame duck session as quickly as possible. However, there are a number of big items that they will be trying to get out the door before the close of the session—specifically a clean continuing resolution to fund the government through March 31, 2017; the Water Resources Development Act; the 21st Century Cures Act and the National Defense Authorization Act. The House (which has been in session fewer days then the Senate and is therefore the one by which the CRA deadline will be measured) is currently scheduled to be back in session on November 29 and be in session through December 16. Even if the House is able to quickly tackle its big to-do list and wrap things up early by December 9, as Mr. Hoppe indicated the Speaker is hoping, that will still mean another week of days in legislative session which will be enough to get the overtime rules past the 60-day mark. It now remains to be seen whether, in light of the injunction, the House Republicans will try to push for an even earlier recess date to ensure that the overtime rules do not clear the CRA window.”

Follow PPB Newslink for more on this ongoing issue.

The mission of the SBLC, of which PPAI is a member and for which PPAI President and CEO Paul Bellantone, CAE, serves as a board director, is twofold: to make improvements in public policy for small business and to help member associations in their communications with business members. Please note that this update is for the sole personal, informational use of PPAI members and should not be posted to any website.

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