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Court stops enforcement of new overtime rule

Posted by Eve Gleason on Nov 23, 2016 11:20:05 AM

A new overtime rule from the Department of Labor was issued on May 18, 2016, under the Fair Labor Standards Act (FLSA). It was scheduled to go into effect Thursday, December 1st.

The rule would have affected many pregnancy center employees and was expected to raise the cost of labor significantly.

But yesterday, a federal judge issued a preliminary injunction blocking enforcement of the rule while the courts determine whether the Department of Labor overstepped its authority in creating the rule. The judge's order came in response to lawsuits opposing the rule, filed by 21 states, the U.S. Chamber of Commerce, and other business groups.

“A preliminary injunction preserves the status quo while the court determines the department’s authority to make the final rule as well as the final rule’s validity,” 

-Judge Amos Mazzant, U.S. District Court for the Eastern District of Texas (Nov. 22 ruling)

What this means: No changes need to be made as of 12/1/2016. Pregnancy centers and other employers can continue to operate under the current rule, under which non-exempt employees (typically paid less than $455 per 40 hour week) must be paid time and a half for additional hours worked (over 40 in a week).

What this does not mean: The rule has not gone away. The Obama administration's Department of Labor will continue to push for enforcement of the rule. If federal courts find that the final rule is valid, pregnancy centers and other employers will still be responsible to comply with it.

Pregnancy center board members and executives should ensure the center is in compliance with current overtime pay requirements and be prepared to comply with the new overtime rule if courts allow it to be enforced in the future.

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