Could the New Overtime Rules Be Rescinded or Revised?As most employers know by now, the new overtime rules are scheduled to take effect on December 1 and an estimated 4.2 million employees will become eligible to benefit from them. Is there any chance the rules might not happen? A challenge is brewing in a federal court in Texas and business groups are hoping the incoming Trump Administration will step in and reduce or eliminate the burden on employers, but the December 1 deadline stands.
The Federal LawsuitEarlier this year, two lawsuits were filed in a federal court to challenge the new overtime rules. One lawsuit was filed by 21 state attorney generals and one was filed by the U.S. Chamber of Commerce and other business groups. The two lawsuits have now been combined and will be heard in the U.S. District Court for the Eastern District of Texas.
It's possible that the judge assigned to the case could issue an injunction before December 1.
How Does the President-Elect Feel?Some business groups have expressed hope that After President-elect Donald Trump takes office on January 20, 2017, the U.S. Labor Secretary he appoints will roll back the overtime rules. Trump said on the campaign trail that he would like to see an exemption for small businesses.
However, the new administration can't just quickly undo the rules. It would have to follow a rule-making process that could take months, or even years. It's possible Congress could pass legislation that limits the rules, phases them in over time or eliminates the automatic inflation adjustment to the salary threshold that's currently scheduled to occur every three years.
The new overtime rules weren't a focus of the presidential campaign so it's not clear whether the new administration sees them as a priority. Of course, once they go into effect, it will be difficult to take overtime pay away from employees.
At this point, it seems unlikely that the new overtime rules won't go forward as scheduled. The bottom line is that businesses must be prepared to begin complying on December 1. We'll keep you apprised of any changes.
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