We’ve been waiting on something to happen to Obama’s overtime rule since December when federal judge, Amos Mazzant, put an injunction on it following a challenge put forth by 21 states and dozens of business groups. Finally, 8 months later, we have an answer.
Timeline of Events
- May 2016 – The Department of Labor published the final rule on the overtime salary threshold.
- November 2016 – A federal judge in Texas issued an injunction against the the rule just 10 days before the rule was to go into effect.
- December 2016 – The Department of Labor appealed the injunction to the 5th Circuit Court of Appeals.
- May 2017 – The DOL got an extension on the appeal.
- July 2017 – The Trump administration said they would work to set a new rate, but in July the DOL decided to drop the appeal and to grant the 5th Circuit Court of Appeals the authority to make a final ruling on the matter.
- August 2017 – On August 3, 2017, the court ruled that the salary threshold was set too high and invalidated the rule.
What This Means for Employers
Many employers switched over their employees from salaried to hourly status in advance of the ruling going into effect last December. Even after the injunction, many employers kept their employees classified as hourly because switching them back and forth was not only an administrative headache but because they didn’t want to deal with the possibility of back pay if the rule ended up going through.
At this point, employers that had given raises to their salaried employees or reclassified them as hourly are free to reverse it now. The rule is dead and it isn’t likely that Trump’s DOL will make any changes to the threshold any time soon.