Federal Judge Blocks Implementation of DOL’s New Overtime Regulations
November 23, 2016
In a surprising 11th-hour move, late Tuesday, November 22, 2016, a Texas federal court issued a nationwide preliminary injunction blocking the U.S. Department of Labor’s (DOL) new Fair Labor Standards Act “white-collar” overtime exemption regulations from taking effect on December 1, 2016.
U.S. District Judge Amos Mazzant, who was appointed to the federal bench in 2014 by President Obama, issued the injunction stopping the DOL from implementing the new regulations. In a case brought by 21 states against the DOL, Judge Mazzant found that the DOL acted without statutory authority when it issued regulations more than doubling the current minimum salary requirement and providing for automatic updates of the minimum salary amount every three years.
At the very least, the injunction will put on hold the effective date of the new regulations, which had been December 1. This means that the existing Fair Labor Standards Act (FLSA) regulations, with the minimum weekly salary requirement of $455, will remain the law of the land come December 1.
Employers now face considerable uncertainty. Many employers already have made changes to employees’ salaries and overtime exempt statuses in anticipation of the new regulations taking effect next week. Other employers have sent communications to employees announcing changes that will take effect next week, all in response to the new regulations.
However, the fate of the new regulations is now in serious doubt. The Trump Administration is set to assume control of the White House in January. While yesterday’s decision likely will be appealed by the DOL, it is not clear whether and to what extent the Trump DOL will pursue the appeal and continue to defend the regulations’ validity in court.
As a result of yesterday’s injunction, it now appears that the new regulations will not take effect on December 1. What lies ahead for the regulations is less clear, creating frustrating uncertainty for employers and employees alike.
Employers have several options to consider at this point, and there is no one size fits all answer. Employers will need to think carefully, and strategically, about how to move forward.
© 2016 McNees Wallace & Nurick LLC
Employment Law Client Alert is presented with the understanding that the publisher does not render specific legal, accounting or other professional service to the reader. Due to the rapidly changing nature of the law, information contained in this publication may become outdated. Anyone using this material must always research original sources of authority and update this information to ensure accuracy and applicability to specific legal matters. In no event will the authors, the reviewers or the publisher be liable for any damage, whether direct, indirect or consequential, claimed to result from the use of this material.