Dec 01, 2016
By Tim Terry, Founder Terry Lockridge & Dunn/World Trend Financial
The Department of Labor was blocked from implementing a rule change which would have redefined the mandatory overtime rules for salaried employees. The rule was supposed to go into effect today. However, 21 states and many more business groups received an early Thanksgiving treat when U.S. District Judge Amos Mazzant granted their request for an injunction against the law going into effect.
Under the new rule, the threshold for mandatory overtime pay would have been raised to $47,500. The previous amount was $23,600 and was put in place 40 years ago.
While the ruling is temporary and subject to appeal if upheld; it is unlikely to survive the scrutiny of the U.S. 5th Circuit Court of Appeals. This is the same court which blocked previous Obama administration actions. However, since the DOL has expressed its belief the rule is legal, we are facing a period of uncertainty which will likely take months to resolve. The administrative rule is further impacted by the election results. Both the President –elect and members of the congressional majority have expressed their disdain for the rule.
Over 4 million employees and their employers are affected by this turn of events. Many employers have already implemented the changes necessary to comply with the new rules. To reverse course courts poor morale on the part of their employees and upends a lot of business planning.
Conversely, an unleveled playing field is the result of operating in a market place where not all employers are applying uniform wage rules.
As I witness this process, I am reminded of my college days in the packing house. This is just how hot dogs are made!