Judge Blocks New Overtime Rule
On Tuesday of this week, a federal judge sitting in Texas issued a preliminary injunction blocking the Department of Labor’s (DOL) regulation, scheduled to take effect on Dec. 1, 2016, that would have doubled the minimum salary necessary for exempt status under the “white collar” exemptions to $47,476. The court held that the plaintiffs (21 states) in the suit had made a prima facie showing that the new DOL minimum salary rule and its automatic future increases “are without statutory authority.” The court held that the plaintiffs (21 states) in the suit had made a prima facie showing that the new DOL minimum salary rule and its automatic future increases “are without statutory authority.”
This injunction is nation-wide, and blocks DOL’s enforcement of its new rule anywhere in the United States.
The injunction is temporary for now, and will remain in effect until the Texas court further analyzes the matter and issues another ruling which may continue, modify, or dissolve the preliminary injunction. It is impossible to predict with certainty whether the DOL will appeal the injunction. In addition, the Obama administration could attempt an appeal, and it is unclear what will happen under the Trump administration. In the interim, no employer is required to comply with the DOL regulation. Many employers were bracing for the impact of the rule, dramatically increasing the salaries of their exempt personnel or converting them to hourly, non-exempt employees. It had been expected that the rule would affect as many as four million workers who would become eligible for time and a half pay. Employers now have the option of proceeding with the changes they have already made to comply with the DOL regulation, or reversing those changes unless and until the injunction is vacated.