Federal Judge Blocks New Overtime Rules

In a surprise ruling, a federal judge in Texas today issued a nationwide injunction preventing the new overtime rules issued by the Department of Labor from going into effect on December 1.  Twenty-one states had filed suit against the U.S. Department Labor challenging the validity of the new rules.  In granting the request for a preliminary injunction, U.S. District Judge Amos Mazzant decided that the states were likely to succeed in their challenge and that there would be irreparable harm if the rules were allowed to go into effect next month.

As discussed in prior posts, the rules would have implemented a new minimum salary threshold of $913/week for employees falling within the “white collar” exemption under the Fair Labor Standards Act.

Although it is clear that the rules will be delayed as a consequence of the ruling, it is not clear whether this delay will be measured in weeks or months.  It also is possible that the injunction may lead the incoming Trump administration to roll the rules back in their entirety or to implement one of the compromise positions urged on the administration by business groups.

Until further action by the court or the Department of Labor, employers who have not yet taken steps to comply with the new overtime rules may want to put any contemplated changes on hold.  We will provide further information about developments in this area as soon as they occur.

 

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