The Fair Labor Standards Act is the federal law that regulates, among other things, overtime pay for US workers. It has been a source of concern for small and big businesses that the US Department of Labor was set to enact - effective December 1, 2016 - a new rule which raised the salary cap below which workers must receive overtime pay from $455 a week to $921 per week (the "Overtime Rule"). In other words, the new Overtime Rule was about to make roughly 4 million more workers eligible for overtime: almost all workers who earned up to $47,892.00 annually.
This rule applied to all organizations: both for profits and non profits.
The compliance aspects of this were messy to say the least.
Twenty one states and more than 50 business groups filed suit in federal court to challenge the validity of the rule. This week, and at least temporarily, the plaintiffs won: US District Judge Amos Mazzant granted the plaintiffs an injunction nationwide against the DOL which halts the implementation of the DOL Overtime Rule until a trial on the merits can occur.
It would be easy to say that the practical outcome of this is that the DOL Overtime Rule is dead in the water. But that is only a temporary statement, and we will have to wait and see what the Trump Administration decides to do with this issue. The injunction stops the implementation of the rule temporarily. The court will have to schedule a trial - assuming that the DOL under the Trump Administration wants to maintain its course. Given the unpredictability of the current political climate, it is difficult to say what course of action the new administration will take with respect to this issue.
This space will be updated as this issue evolves. For now, however, companies' overtime practices should continue as they were prior to the Overtime Rule issue.