HR Compliance

How the Results of the Presidential Election Could Affect Overtime Expansion

By

Amy Double

| Nov 10, 2016

Updated November 23, 2016: Federal judge in overtime expansion hearing issues ruling; delays the compliance deadline for the rule. To learn more, click here.

With new leadership headed for the White House in 2017 and a pending court date set, you may be wondering what the future holds for the Fair Labor Standard Act’s overtime expansion rule.

Ultimately, no one can predict exactly what will happen; however, the general consensus is: Although the compliance deadline may be delayed, employers should continue to prepare as if the rule will go into effect on Dec. 1, 2016.

Recent efforts made to block overtime expansion

Two recent lawsuits have been filed by states and business groups in the U.S. District Court for the Eastern District of Texas.

On Sept. 20, 2016, 21 states filed a lawsuit in the District Court against the U.S. Department of Labor. On the same day, with the same court, over 50 business groups collectively filed a similar lawsuit.

On Oct. 12, 2016, the states filed an emergency motion for a preliminary injunction request. This motion essentially asks that overtime expansion not go into effect until case issues have been resolved.

A week later, on Oct. 19, 2016, the District Court Judge Amos Mazzant III – an Obama appointee – combined the lawsuits brought by the states and the business groups, who had asked the court for an expedited decision in their case. The court set a hearing for Nov. 16, 2016 to address the injunction request and decide whether the new rule will go into effect on Dec. 1, as planned. After the hearing, Judge Mazzant did not make a decision, saying instead that he will consider each side’s arguments and issue a ruling Tuesday, Nov. 22.

How the presidential election could impact those efforts

Taking all factors into consideration, including the likelihood that a Republican Congress and administration will likely attempt to overturn or reshape the rule, it’s possible the court could grant the injunction, which may delay the compliance deadline.

However, this potential delay does not necessarily mean the rule and its implications for employers would be undone. According to the Society for Human Resource Management, on Aug. 12, 2016, President-elect Donald Trump said that he favors a small-business exemption, meaning that employers could have to comply with a modified form of the rule.

Need a refresher on the Department of Labor’s Overtime Expansion Rule?

It’s also important to note that while the Obama Administration has promised to veto any efforts to repeal the rule, it’s likely that after January 20, 2017, the Republican controlled Congress would work with the Trump Administration to draft an agreeable modification of the rule. It’s also possible that the rule could remain intact if FLSA Overtime Expansion reform is not prioritized under new Washington leadership.

Again, while no one can predict what will happen, the common agreement is although it’s possible the compliance deadline will be delayed, employers should remain on course to achieve compliance with the rule by Dec. 1, 2016.

 

DISCLAIMER: The information provided in this blog is for general informational purposes only. Accordingly, Paycom and the writer of the above content do not warrant the completeness or accuracy of the above information. It does not constitute the provision of legal advice, tax advice, accounting services, or professional consulting. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal or other professional services.

About the Author

Amy Double

Amy, a tenured professional in sales and marketing with over 10 years of experience, is dedicated to creating content focused on helping organizations achieve their business goals. As an experienced writer, Amy is committed to researching and blogging about topics that affect businesses across multiple industries, including manufacturing, hospitality and more. Outside of work, Amy enjoys reading, entertaining and spending time with family.

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