Federal Judge Blocks New Overtime Regulations that Were to Take Effect December 1, 2016
As we reported earlier this year, on May 18, 2016, the Wage and Hour Division of the U.S. Department of Labor published a final rule to be effective as of December 1, 2016, which would raise to $913 per week, or $47,476 per year, the minimum salary level for exemption from overtime pay for salaried executive, administrative and professional employees. The Department predicted that the new rule could make 4.2 million previously exempt salaried U.S. workers eligible for overtime pay.
Yesterday afternoon a federal judge in the U.S. District Court for the Eastern District of Texas issued a nationwide injunction against the new white collar exemption salary rule, preventing it—for the moment—from becoming effective as of December 1. The case is State of Nevada, et al. v. U.S. Department of Labor, et al., Docket No. 4:16-cv-00731-ALM.
The court will now proceed to schedule and conduct a hearing on the motion for permanent injunction and issue a further ruling. That process will likely take several months. If a permanent injunction is granted, the rule will be permanently invalidated. If a permanent injunction is denied, the preliminary injunction will likely be lifted on short notice. The Department of Labor could also seek an early appeal to the U.S. Court of Appeals for the Fifth Circuit (an appellate court above the trial court and below the Supreme Court), but that too would likely take weeks or months.
It is also yet to be seen what action, if any, the president-elect and the new Congress will take with respect to these regulations once in office in January, 2017. But for now the rule is not in effect.
For questions concerning these regulations and the judge’s decision, please contact one of Rudman Winchell’s experienced labor and employment law attorneys.