Hold everything!! Those overtime rules not yet in effect!

Today was the day when the new federal rules pertaining to overtime compensation were supposed to take effect.  Those rules, adopted pursuant to the Fair Labor Standards Act, would have a major impact on school district budgets and the economy as a whole.  Unlike some changes coming from Washington, the FLSA changes went through the customary channels of rule-making. The rules that were to go into effect today were proposed, widely publicized, commented on (293,000 comments!) and then finally promulgated as final.  Critics have frequently charged the Obama Administration with not following the proper process, issuing executive orders rather than properly adopted rules. But on this issue, the proper process was followed.

Nevertheless, a federal judge has put the kibosh on the whole thing. The judge issued an injunction that will stop the new standards from being enforced.  The judge held that the Department of Labor had exceeded its statutory authority by adopting a test for FLSA exemption that measured salary more so than duties.   Under the new rules, a person performing executive, administrative or professional duties would be entitled to overtime compensation if the salary was too low.  This, the court, held, imposed a de facto “salary only” test that was not authorized by the statute.  Exemption or non-exemption from FLSA standards is supposed to be measured by duties—not salary.

The injunction will remain in effect until the court decides the case on the merits, and who knows how long that will take. In the meantime, as you have probably heard, there is a new sheriff headed to town in Washington. So all we can say about this, for now, is stay tuned.  If you have questions about the immediate impact of this non-change in your districts, the lawyers at Walsh Gallegos Trevino Russo & Kyle are ready to help.