Removing Barriers Blog

Court Challenge to Overtime Rule to Continue
Posted January 09, 2017 by CUNA Advocacy

In late November, a federal district court in Texas in the case Nevada v. U.S. Department of Labor, U.S. District Court for the Eastern District of Texas, granted an emergency preliminary injunction stopping the Department of Labor (DOL) from enforcing its rule for overtime pay, which was set to go into effect on December 1. This month the court ruled that the appeal can continue, which means the court could at any time grant the request to permanently stop the rule from moving forward.

The DOL appealed this ruling and oral arguments are set for January 31. Notably however, they will happen after President-elect Trump takes office on January 20 and appoints a new Secretary of Labor. Andrew Puzder, who President-elect Trump has indicated is his choice for the new Secretary of Labor, has expressed opposition to the overtime rule. Accordingly, it is possible the DOL will withdraw the appeal after the new Administration takes office. It is also possible the DOL will make changes. 

As CUNA previously noted, while many credit unions have already made changes to come into compliance with the rule, a court decision or legislation modifying the rule could help relieve the compliance challenge of having to continue to make changes every three years.  

CUNA also expects that Congress will once again be introducing legislation that makes changes to the DOL final rule. We will continue to update credit unions about the progress of the litigation and any potential Congressional actions.