Congress May Rescind Some Employment Rules Next Year, Court Decision on Overtime Expected Next Week

November 17, 2016

A handful of key Labor Department rules remain in play as a federal court in Texas signaled it will rule on enjoining the final overtime rule next week, and Congress could strike down two or three other employment rules next year with a little-used law enacted in 1996.  Under the Congressional Review Act (CRA), Congress has 60 "legislative days" to override major final regulations with just 51 votes in the Senate and a majority in the House.  The Senate vote on a CRA resolution cannot be filibustered.  The "60 legislative days" provision limitation means any final rule with an annual cost of over $100 million that was published after May 30, 2016 could be subject to the CRA.  Accordingly, the final blacklisting and paid leave regulations for federal contractors could be struck down by Congress early next year regardless of whether resident Trump rescinds the executive orders from which the rules arose.  Because of how the CRA defines a "major rule," it is unclear at this time whether Congress could also overturn the changes the EEOC made to the EEO-1 report that would require all employers to report pay data in 2018.  In contrast, the final overtime rule published on May 23, 2016 is not subject to congressional action under the CRA.  Still, this week, District Court Judge Mazzant in the Eastern District of Texas heard oral arguments for a preliminary injunction against the final overtime rule, which takes effect December 1.  Court documents show Judge Mazzant hopes to issue an initial ruling on the injunction on Tuesday, November 22nd.  One possible ruling would be to allow the increase in the minimum salary for FLSA exemptions to stand, while striking down the later inflation adjustments provided in the rule.  Separately, this week, District Court Judge Sam Cummings permanently stopped implementation of DOL’s persuader rule because it is inconsistent with the Labor-Management Reporting and Disclosure Act, and DOL is not expected to appeal the decision.