The Outlook is Dim For The New Overtime Rules

Unless you hibernate for the winter, you already know that the long-awaited changes to the federal overtime rules were enjoined by a federal judge in Texas prior to their December 1, 2016, implementation date.

These overtime rules were expected to make more than 4 million workers newly eligible to receive the legally mandated premium of time-and-a-half for all overtime hours in a work week. The Department of Labor (DOL) has appealed the decision, and the appeal is presently pending before judges in the US Court of Appeals for the Fifth Circuit.

The Picture is Getting Clearer

The new Trump administration has yet to take any official action directly related to the overtime rules. However, their recent actions regarding pending regulations in general may very well indicate that the overtime changes may be headed to the afterlife.

On Inauguration Day, White House Chief of Staff Reince Priebus issued an order freezing all federal regulations that have not been formally published in the Federal Register.  The order also requires all regulations that have been published “but have not taken effect” to be postponed for at least 60 days, and then for an additional period “beyond that 60-day period.”  Only after both of these delays and in mandatory consultation with the Trump-appointed Director of Office of Management and Budget can “further appropriate action” be taken.

It cannot be said for sure that the overtime rules, which were set to go into effect on December 1, 2016, are subject to Priebus’ order. It seems reasonable to believe, however, that the federal judge’s order barred the DOL from “implementing and enforcing” the new overtime rules, those rules have not yet taken effect and therefore are frozen.  The DOL would have to counter by saying that the rules are already “in effect” and that the judge simply has stalled their enforcement.

More Signals

In addition, the Department of Justice (DOJ), who is representing the DOL in the appeal, has just requested a 30-day extension of the deadline for filing their brief.  According to the filing, “the extension is necessary to allow incoming leadership personnel adequate time to consider the issues.”  In other words, the DOJ want to put the appeal on hold while the Trump administration decides whether to defend the rule.

If the DOJ decides not to pursue the appeal, it seems likely that the injunction against enforcing the rules would remain in place since there would be nobody pushing to do anything else.

Bottom Line

While the crystal ball is still a bit hazy, signs continue to point to the likelihood that the new overtime regulations will soon be the “old regulations” without ever actually seeing the light of day.