The much-discussed and controversial Overtime Rule, slated to take effect on December 1, has been put on hold by a federal judge, just 10 days before the implementation deadline. The decision, which was handed down on Tuesday, November 22, provides relief to many small business owners, who were facing daunting tasks such as re-writing job descriptions, making adjustments in salaries, as well as making employee schedule modifications.
Judge Amos L. Mazzant III, of the U.S. District Court for the Eastern District of Texas, issued the Preliminary Injunction, in response to a motion filed by 21 state attorneys general. The decision hinged upon the EAP classification, better known to RSPA members as the Executive, Administrative, and Professional classification of employees–white collar workers. During a November 2 webinar hosted by RSPA Attorney, Bob Goldberg, RSPA members were apprised that, while evaluating employee descriptions and pay rates, several tests (established by the Department of Labor as determining factors for EAP exemption) would need to be given to ensure compliance with the new rule. Among those tests were a salary test and “duties” test.
In his decision, Mazzant asserts that when establishing the EAP exemption, Congress did not intend for the salary test to supercede the duties test, and, as a matter of fact, “defined the EAP exemption with regard to duties, which does not include a minimum salary level.” The order found that the new Rule’s requirement that if an executive, administrative, or professional employee made less than $913/week then that person was eligible for overtime, was, unlawful, and that Congress should be the final decision maker on any rule changes of this kind.
According to a release by the American Society of Association Executives, the decision was made as a part of Nevada v. U.S. Department of Labor, and will have national impact, despite Obama administration efforts to limit the national effect of any injunction.
Members should place on hold any action in response to the proposed rules. An appeal could take months. It is also questionable if the rules will ever take effect under the new administration and Congress.
The RSPA will keep you informed of the latest updates on this very important case. RSPA is your industry resource for important issues affecting your business: check our website, www.gorspa.org, for timely information on topics like the latest on EMV chargebacks, more detail on the Overtime Rule, and more.
