Chamber Legislative Alert: Overtime Rule Delayed

On Tues., Nov. 22, 2016, Naperville Area Chamber of Commerce President & CEO Nicki Anderson issued the following letter to members of the local business organization regarding the Department of Labor’s new overtime rule.

Business owners, whether members of the NACC or not, will find this news informative since many owners and managers have been receiving training and preparing for the new overtime rule that was to take effect on December 1, 2016.

At the same time, in recent months, nearly half of the nation’s states and a large coalition of business groups filed separate lawsuits challenging the www.dol.gov/featured/overtime.

Dear Members,

The new overtime rule was scheduled to take effect on December 1, 2016 and raised the white collar exemption for workers who are eligible for overtime to $47,476 a year.  Now, with that rule delayed, the current threshold of $23,660 a year still applies.  This means that approximately four million white collar workers who make more than $23,660 a year are not eligible for overtime, at least in the short term. So, what does this mean for the future of the rule and for the changes many businesses have already implemented?  In short, the answer is still unclear but it certainly seems more promising for businesses.

Note however that Judge Mazzant’s ruling here is a temporary injunction.  In the decision he writes that a, “preliminary injunction preserves the status quo while the Court,” considers the merits of the case.  He goes on to say that, “[d]ue to the approaching effective date of the Final Rule, the Court’s ability to render a meaningful decision on the merits is in jeopardy.”

So, as he continues to consider those merits he still may decide that the Final Rule is valid and enforceable, just at a later date.  Mazzant may also overrule the Final Rule in part, such as the automatic readjustment every three years, while keeping the threshold intact.  Though, that certainly seems less likely than it was yesterday.

In the meantime, there is still a bill passed by the House of Representatives, currently in the Senate, which would further delay the implementation of the Final Rule.  In addition, it is widely expected that President-Elect Trump’s administration will be antagonistic to the Final Rule.  If the court case continues to drag on past the inauguration, it is possible that Trump’s administration could drop the defense or issue a new overtime rule which rolls back the new grants in part or in whole.

We will continue to keep you up to speed with any further developments.

Please contact Colin Dalough, cdalough@naperville.net, with any questions.

Sincerely,