New Overtime Pay Rules Put on Hold

Pension Fund seeks to keep you informed of our ever changing landscape for employment and benefits. Yesterday, a judge in east Texas issued an injunction blocking the changes to the Department of Labor (DOL) definitions of non-exempt and exempt employees (the increase in the minimum salary requirements). These changes were due to take effect on December 1, 2016.

This leaves many of us asking 'What happens next?' The injunction is 'preliminary.' It provides the court with time to consider its final decision about whether the new regulations are legally permissible, and (arguably) avoids the problems that would be caused if the regulations were implemented and then retracted.

The Department of Labor faces an uphill battle with the Texas court and is considering its options. It could appeal the decision within 60 days (this timeframe may be extended). A Fifth Circuit judge could potentially stay the injunction pending a decision on the appeal. If the DOL does not appeal the preliminary injunction, the Texas District Court could still reconsider its reasoning for the preliminary injunction and decide not to issue a permanent injunction. If the court issues a preliminary injunction, the DOL could then appeal that decision.

Bottom line: Employers cannot rely on this preliminary injunction becoming permanent and should have a plan in place to implement necessary changes should a court lift the injunction.

One additional question is 'What do I do if we've already given a raise effective 12/1/16?' This is an ethical question that each employer will need to answer. Employers should keep in mind the need for a plan referenced above.

Specially, for the church, the DOL definitions do not apply to clergy under the ministerial exemption, for program staff who instruct the faith and church music staff.

Below are some resources for your consideration, keeping in mind Pension Fund does not offer legal or tax advice. However, you are free to share this with others.

http://churchlawgroup.com/resources/blog/new-overtime-regulations/
https://www.churchmutual.com/media/safetyResources/files/BestEmploymentPractices.pdf