Federal Court Blocks Overtime Rule


    On November 22, 2016, a federal district court judge in Texas issued a nationwide injunction blocking the implementation and enforcement of the Department of Labor’s Final Rule dramatically increasing the minimum salary level for exempt employees from $455 per week to $913 per week.  The Final Rule was challenged by 21 states and numerous groups representing businesses. In his order, Judge Amos Mazzant ruled that Congress intended the executive, administrative and professional exemptions to “depend on an employee’s duties rather than an employee’s salary” and the Final Rule “exceeds its delegated authority and ignores Congress’s intent by raising the minimum salary level such that it supplants the duties test.”   The Department of Labor had repeatedly commented that over 4 million currently exempt workers would automatically become non-exempt due to the salary level increase.  According to Judge Mazzant, “if Congress intended the salary requirement to supplant the duties test, then Congress and not the Department, should make that change.” 

    While this preliminary ruling is subject to further consideration and appeal, the new regulations will not be going into effect December 1, 2016, if at all. Stay tuned for further developments on this and other labor and employment issues.

Disclaimer: The article in this publication has been prepared by Eastman & Smith Ltd. for informational purposes only and should not be considered legal advice. This information is not intended to create, and receipt of it does not constitute, an attorney/client relationship.