A year ago, employers across the country prepared for the implementation of a new overtime rule that would dramatically increase the salary threshold for white-collar exemptions, on the understanding that the new rule would soon go into effect “unless something dramatic happens,” a phrase we and others used repeatedly.

And, of course, something dramatic did happen—a preliminary injunction, followed by a lengthy appeal, which itself took more left turns following the U.S. presidential election than a driver in a NASCAR race. The effect was to put employers in a constant holding pattern as they were left to speculate whether and when the rule would ever go into effect.

The current status of the overtime rule is but one of several prominent issues to reckon with as wage and hour issues, investigations, and litigation remain as prevalent as they have ever been.

The articles in this edition of Take 5 include the following:

  1. The Status of the Department of Labor’s 2016 Overtime Rule
  2. Recent Developments Regarding Tip Pooling
  3. Mandatory Class Action Waivers in Employment Agreements: Is a Final Answer Forthcoming?
  4. “Time Rounding”: The Next Wave of Class and Collective Actions
  5. The Department of Labor, Congress, and the Courts Wrestle with the Definition of “Employee”

Read the full Take 5 online or download the PDF.

As many will recall, the Department of Labor’s (“DOL”) overtime rule, increasing the salary threshold for overtime exemptions at the behest of the Obama administration, was scheduled to take effect on December 1, 2016. Months later, it remains in limbo before the Fifth Circuit Court of Appeal. And it apparently will remain in limbo for at least several more months.

After publication of the final overtime rule on May 23, 2016, two lawsuits were filed by a coalition of 21 states and a number of business advocacy groups, claiming that the DOL exceeded its rulemaking authority in finalizing the overtime rule. The lawsuits, which were consolidated, sought a variety of relief, including a preliminary injunction blocking the overtime rule from taking effect.

Days before the final rule went into effect, the United States District Court for the Eastern District of Texas granted Plaintiffs’ motion and issued a nationwide preliminary injunction. Prior to President Trump’s inauguration, the Department of Labor appealed the order to the Fifth Circuit. Thereafter, the DOL was granted two extensions of time to consider whether it wished to proceed with the appeal.

The most recent extension was set to expire on May 1, 2017 . Now, the DOL has requested – and the Fifth Circuit has granted – yet another 60-day extension because Secretary of Labor nominee Alexander Acosta has not yet been confirmed. In granting the extension, the Fifth Circuit continued the DOL’s deadline to file its reply brief to June 30, 2017.

This most recent extension will give additional time to the DOL to evaluate its options, which includes abandoning the appeal and any further efforts to implement and enforce the overtime rule. It is important to keep in mind, however, that even though Secretary of Labor Nominee Acosta does not appear to support the Obama administration’s plan to more than double the salary threshold, he has expressed opinions that suggest he would support updating the overtime rule to some degree, possibly increasing the salary threshold to mirror inflation. It is also important to be mindful that certain states, including New York and California, have a higher minimum salary threshold than the current federal requirement of $455 per week. We will continue to monitor and report on this important matter as it develops.

As we previously discussed here, acting on behalf of the Department of Labor (“DOL”), the U.S. Department of Justice (“DOJ”) urged
the Fifth Circuit Court of Appeals to expedite briefing on its interlocutory appeal of a Texas district court’s nationwide preliminary injunction barring implementation and enforcement of the new overtime rule that would double the minimum salary threshold for white-collar exemptions, among other things. The injunction was issued just days before the rule was to go into effect on December 1, 2016.

The DOJ obtained a fast-tracked briefing schedule from the Court of Appeals that would set up the appeal for oral argument and adjudication by January 31, 2017. Now, the DOJ has requested – and obtained – additional time to review and brief the issue that it had sought to fast-track.

Shortly after the inauguration of our new President, the new administration requested a 30-day extension for the DOJ to file its reply brief, to March 2, 2017. The reason for the request was “to allow incoming leadership personnel adequate time to consider the issues.” The Court granted the extension.

The additional time will allow the new administration to continue evaluating its options and the steps necessary to implement whatever route it elects. Among its options would be to abandon the appeal and to abandon efforts to implement and enforce the new rule. We will continue to monitor this important matter as it develops.