New York partner Jerry Hathaway and Los Angeles partner Mark Terman have been quoted in a series of publications regarding the national preliminary injunction on the overtime rule. U.S. District Court Judge, Amos Mazzant, placed a hold on the overtime rule, concluding that the DOL exceeded its authority. The rule would require that – by December 1 – all exempt executive, administrative or professional employees earn at least $913 per week ($47,476 annually) – more than doubling the current existing minimum salary level of $455 per week.
In an SHRM article titled, “How to Proceed After Last-Minute Overtime Rule Freeze,” Jerry suggested employers who have already setup changes send a communication to their employees indicating changes were made based on the December 1 regulation taking effect, but may be revaluated.
“If an employer is in a position to [reverse] changes scheduled to take effect next week, it can do so with some confidence, solely on the basis of this decision," Jerry said. "Many employers, however, already have the changes teed up to go into effect next week. Those employers can send a communication to employees indicating the changes were made based on the regulation taking effect Dec. 1, but the changes will be re-evaluated as further legal developments occur."
In an earlier SHRM article titled, “21 States File Emergency Motion to Bar FLSA Overtime Rule,” Mark projected that while employers should still prepare to comply with the rule, the prospects for an injunction to be granted were quite good.
“The chances that the motion will be granted are relatively good in my view," Mark said. "Trial courts tend to rule on the side of preserving the status quo."
A Forbes article titled, “Congress Can Kill Overtime Rule For Good, But Court Might Revive It In The Meantime,” as well as an SHRM article titled, “When Will There Be a Final Decision on the Overtime Rule?,” Jerry noted that the Judge Mazzant’s ruling turns 65 plus years of how the FLSA (Fair Labor Standards Act) has been interpreted on its head and stated that the decision will likely be heard by the Fifth Circuit Court of Appeals, who could rely on the papers already submitted.
Jerry was also quoted in The Hill in an article titled, “Trump faces tough decision on overtime rule.” While Obama has claimed that the rule would help lift more than four million people out of poverty, Republicans say that it would hurt small businesses.
“This might drag out into the change of leadership in Washington, and it’s possible a Trump administration could abandon the overtime rule.”
The Washington Free Beacon published an article titled, “Many Companies Will Move Forward With New OT Regs Despite Injunction.” Jerry noted that the injunction will likely not cause employers to retract their promised raises or reorganization.
“Most large employers have teed up to put the policy into place,” Jerry said. “The consequence being that many large employers are going to stick with what they were going to implement anyway. Small companies can hit the brakes and do so with comfort.”
In an SHRM article titled, “Overtime Rule Hang-Up Requires Careful Communication About Pay Decisions,” Mark noted that there are three basic steps employers should use when communicating about the overtime rule.
• Designate HR to inform and answer questions of employees and managers.
• Develop the written communications that describe what is happening, why it is happening, what it means to affected employees and who to contact with questions.
• Develop consistent talking points to be used by HR and managers.
Read “How to Proceed After Last-Minute Overtime Rule Freeze.” (SHRM)
Read “21 States File Emergency Motion to Bar FLSA Overtime Rule.” (SHRM)
Read “Congress Can Kill Overtime Rule For Good, But Court Might Revive It In The Meantime.” (Forbes)
Read “When Will There Be a Final Decision on the Overtime Rule?"(SHRM)
Read “Trump faces tough decision on overtime rule.” (The Hill)
Read “Trump faces tough decision on overtime rule” (TVN)
Read “Obama Takes Parting Shot at Small Businesses.” (WND)
Read “Many Companies Will Move Forward With New OT Regs Despite Injunction.” (The Washington Free Beacon)
Read “Overtime Rule Hang-Up Requires Careful Communication About Pay Decisions.” (SHRM)
Read Mark and Jerry's DBR LaborSphere coverage of the preliminary injunction here.