In 2014, President Obama directed the Secretary of Labor to update the overtime regulations. He agreed with the final ruling; a district court judge in Texas did not.

In 2014, President Obama directed the Secretary of Labor to update the overtime regulations. He agreed with the final ruling; a district court judge in Texas did not.

What the heck is going to happen with the overtime rule, which was to go into effect this Thursday (Dec. 1, 2016)? A judge from the Eastern District of Texas declared the rule unlawful last week, so for now, the ruling is on hold.

The Department of Labor (DOL) has updated the salary level requirements seven times since 1938. And both the Republicans and Democrats in Congress believe it’s time to modernize the overtime rules once again.

However, the DOL made a major change this time around, more than doubling the salary threshold from $23,660 to $47,476. In essence, anyone earning a salary under $47,476 would still qualify for overtime. That makes a huge difference to small businesses everywhere.

On Nov. 22, Judge Amos Mazzant of the Eastern District of Texas granted a nationwide injunction to prevent the ruling from going into effect. According to Reuters, he ruled that the federal law governing overtime “does not allow the Labor Department to decide which workers are eligible based on salary levels alone.”

The DOL says it is “currently considering all of our legal options.”

So, will the rule fade into oblivion? No. Everyone sees the need to update the requirements.

In September, the U.S. House of Representatives passed a bipartisan bill delaying the Dec. 1 implementation of the overtime ruling. President Barack Obama is on record as saying he would veto the legislation should it pass through the U.S. Senate.

The Senate passed its own bill hoping to phase the $47,476 threshold over a five-year period. So clearly both Houses felt the new threshold would handcuff small businesses, including independent tire dealers, at least in the short term.

Also, it doesn’t sound to me like the DOL is confident enough to appeal the district court’s ruling. Maybe if it happened earlier in the year, but a different administration is coming on board Jan. 20, 2017.

Bottom line, there will be changes in the overtime ruling, with the threshold probably reduced. It may happen this year, but both the House and Senate are only in session another three weeks before they shut down for the rest of 2016.

Author

Bob Ulrich
Bob Ulrich

Editor, Retired

Editor Bob Ulrich has earned a reputation as an industry expert thanks to his insightful, in-depth articles and blogs on the tire industry. Before joining Modern Tire Dealer in 1985, Bob earned a B.A. in English literature from Ohio Northern University. Also, he graduated from the University of Akron School of Law with a J.D.

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Editor Bob Ulrich has earned a reputation as an industry expert thanks to his insightful, in-depth articles and blogs on the tire industry. Before joining Modern Tire Dealer in 1985, Bob earned a B.A. in English literature from Ohio Northern University. Also, he graduated from the University of Akron School of Law with a J.D.

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