In the final week of the Obama administration, employers left in limbo awaiting the fate of the FLSA overtime rule may want to mark their calendars for January 31. That's when the U.S. Court of Appeals will hear the Department of Labor's appeal against the November 22 injunction against the rule by Texas judge Amos Mazzant, days before the rule was to take effect. Writes lawyer Susan Eisenberg of Cozen O'Connor, "We cannot lose sight of the fact that the DOL that issued the new regulation was appointed by the Obama administration.... One thing we do know is that the Trump administration will not want to implement any regulation that hurts or is perceived to hurt business."
However, she adds, there could be unintended consequences. "If the Court of Appeals reverses Judge Mazzant’s Order, then the new regulations could become law; at least until there is a final ruling by Judge Mazzant. The DOL under President Trump could withdraw the appeal and instead revamp the regulation altogether. Also, if the new DOL agrees with Judge Mazzant that Congress only authorized the DOL to further define the duties test, then the DOL might do exactly that. This goes under the old adage, be careful what you wish for. A salary level test is clear and concise: an employee’s salary either meets the test or not. A refined duties test might bring nothing but further litigation. Imagine if the new DOL adopts a rule similar to California law, which provides that to be exempt the employee must perform exempt duties at least 51 percent of the time. That rule would invite litigation with employees who claim that they never spend 51 percent of their time on exempt duties."
JD Supra Business Advisor (01/12/17)
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