A nationwide preliminary injunction has been issued blocking the implementation of the Department of Labor’s expanded overtime rule that was to go into effect December 1, 2016. Employers are no longer required to implement the rule by December 1, 2016 deadline. The injunction will remain in place pending further order of the district court or an appellate court. Assuming the injunction outlives the remainder of President Obama’s term, it is uncertain what measures President Trump will take to correct the rule once he is in the White House. This ruling does not impact employers’ need to comply with applicable state law, where it differs from the federal law. Wilson Elser, Bruno W. Katz, summarizes the ruling.
On November 22, 2016, Judge Amos Mazzant of the U.S. District Court for the Eastern District of Texas entered a nationwide injunction blocking the U.S. Department of Labor from implementing a controversial rule that would have expanded overtime protections. The judge held that the rule improperly creates a de facto salary test for determining which workers fall under the Fair Labor Standards Act’s “white collar” exemptions. Under the new regulations that would have gone into effect on December 1, 2016, the minimum annual salary threshold required to qualify for any “white collar” exemption was increased to $47,476, a significant increase from existing regulations.
The judge sided with 21 states and business groups by deciding to issue a preliminary injunction that blocks the DOL’s overtime expansion regulation from taking effect on December 1. “The court determines that the state plaintiffs have satisfied all prerequisites for a preliminary injunction,” Judge Mazzant said. Specifically, the judge held the states and business groups were able to show a likelihood of success in their challenge of the new overtime rule and irreparable harm if the new overtime rules went into effect, while the DOL failed to show it would be harmed if the rules were delayed. The court further stated that the “state plaintiffs have established a prima facie case that the Department’s salary level under the final rule and the automatic updating mechanism are without statutory authority.”
Given this nationwide injunction, the December 1, 2016, effective date for the new rule is stayed from implementation and enforcement pending a final decision from this court or a higher court of appeals. Wilson Elser’s national Employment & Labor practice lawyers are experienced in helping organizations comply with DOL rules and are available to respond to questions you may have about this rule or others throughout the country.
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