Overtime rule update: a last-chance effort to vacate or delay the rule

This article originally appeared in the Seawright & Associates Management Consultants e-newsletter, sent on Nov. 1, and was published with permission from the author, Jean Seawright.

As most employers know, several bills have been introduced in Congress that seek to delay the U.S. Department of Labor's (DOL's) Final Rule ("Overtime Rule") increasing the minimum guaranteed salary level for employees classified as exempt from overtime under the Executive, Administrative, and Professional (EAP) exemptions. The Overtime Rule is set to take effect Dec. 1. None of these bills, including H.R. 6094 that passed on Sept. 28, 2016, stand a chance of impacting the Dec. 1 effective date for the Overtime Rule. Here's why:

1. Currently, neither the House nor the Senate is in session as members campaign in their home states and districts. They will remain out of session through the election and, when they return, are only scheduled for 6-8 session days prior to Dec. 1.

2. Any bill must pass both the House and the Senate. In the unlikely event that H.R. 6094 gets to the Senate floor for a vote and passes, President Barack Obama has already announced that he will veto it. Congress will likely not have enough votes to override the President's veto.

RELATED: Prepare for more pay: 10 things employers must know about the Department of Labor’s new overtime rule.

The only remaining hope for private employers lies with two lawsuits filed in the U.S. District Court for the Eastern District of Texas. The suits were filed in late September by a group of 21 states (on behalf of state government employers) and more than 55 business groups led by the U.S. Chamber of Commerce (on behalf of private businesses). The legal arguments in these cases are different and complex; however, both sets of plaintiffs seek the same outcome: a court ruling that would vacate the DOL's Overtime Rule or, at a minimum, delay it.

The lawsuits are progressing through the legal system and have gained some recent momentum. On Oct. 12, the states filed an Emergency Motion for a Preliminary Injunction, asking the court to temporarily bar the DOL from implementing the Overtime Rule nationwide while their case works its way through the legal system. A hearing on this case is set for Nov. 16.

On Oct. 14, the business groups filed a Motion for Expedited Summary Judgment, asking the court for an expedited ruling to enjoin, vacate, and set aside the new Overtime Rule.

On Oct. 18, the court agreed to consolidate the two cases in order to "expedite trial and eliminate unnecessary repetition and confusion." On the same day, the DOL filed an emergency motion seeking to either stay the business groups' summary judgment motion until the court rules on the states' preliminary injunction OR extend the DOL's response deadline for the summary judgment motion to a date beyond Dec. 1.

RELATED: Time to boost worker salaries? Implement a Department of Labor compliance plan to find out.

On Oct. 31, the court denied the DOL's emergency motion to stay summary judgment, but it did grant the DOL an extension to respond to the motion by Nov. 18. The business groups' response is due Nov. 21 and, if necessary, a hearing will be held on Nov. 28.

What does this mean?

The outcome of the motions and hearings (currently scheduled for Nov. 16 and Nov. 28) could result in anything from vacating a portion of the Overtime Rule (such as the automatic increases to the minimum guaranteed salary level every three years) to delaying the Dec. 1 effective date, or -- better yet -- rendering the entire Overtime Rule unlawful. Any court ruling affecting some or all of the Overtime Rule requirements could apply to state government agencies, private businesses, or both. Any court ruling favorable to employers will not be known until mid-to-late November.

We are closely monitoring the progress of the combined lawsuits daily, knowing that this litigation is the only remaining hope for vacating or delaying the Overtime Rule prior to Dec. 1. As mentioned above, there are complex legal arguments involved in these cases, so as much as we hope for a favorable ruling, there may not be one prior to Dec. 1 (if at all).

For these reasons, as of Nov. 1, 2016, we are continuing to recommend that employers prepare for a Dec. 1 implementation date of the Overtime Rule in its original format.

Jean is president of Seawright & Associates, a management consulting firm located in Winter Park, Fla. Since 1987, she has provided human resource management and compliance advice to employers across the country. She can be contacted at 407-645-2433 or jseawright@seawright.com.

Photo by Laura Watilo Blake.