Federal Court Injunction on Proposed Overtime Rules

HR Bulletin   Updated December 1, 2016


A federal judge in Texas  issued an injunction late this afternoon that blocks the implementation of the Department of Labor’s new federal overtime rules.  “A preliminary injunction preserves the status quo while the court determines the department’s authority to make the final rule as well as the final rule’s validity.” said Judge Amos Mazzant of the U.S. District Court for the Eastern District of Texas.  Judge Mazzant was appointed to the bench by President Obama.

The emergency motion for a preliminary injunction was filed in October by 21 states, and consolidated with another lawsuit filed by the U.S. Chamber of Commerce.  The suits claimed that the DOL exceeded its authority by raising the salary threshold too high and by providing for automatic adjustments to the threshold every three years.

What does this mean to each of you as business owners?  I think we just have to take a deep breath and see what evolves from this ruling. Obviously it puts the December 1 implementation on hold.   The Department of Labor announced today (12/1/16) that they are appealing this motion, so expect a long, drawn out process.  In the meantime, continue to comply with the Fair Labor Standards Act and the current rules for overtime. The December 1 proposed changes are now on hold until the court’s rule otherwise.   More information will be forthcoming in the near term and we will keep you informed as we learn more.

Update: It is likely that no court action will take place before the new administration is sworn in on Friday, January 20.  Our best guess is the current proposed revisions will be discarded and a phased in approach to the salary test for Exempt and Nonexempt employees will evolve over the first six months of the new administration.  1/15/17



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