FLSA Overtime Rule Blocked by Federal Judge

PUTTING PEOPLE FIRST

On Tuesday, November 22, 2016, a Texas federal judge blocked the Fair Labor Standards Act Overtime Rule by issuing a nationwide preliminary injunction. The regulation was scheduled to take effect on Dec. 1 and would have raised the salary limit for which workers could be exempt for overtime pay from $23,660 to $47,476.

Judge Amos L. Mazzant III of the Eastern District of Texas agreed with 21 states and a coalition of business groups, including the United States Chamber of Commerce, that the rule is unlawful and granted their motion for the injunction. The Judge ruled that federal law governing overtime does not allow the Department of Labor to decide which workers are eligible based on salary levels alone and that the Obama administration exceeded its authority by raising the overtime salary limit so significantly. The injunction is only a temporary measure that suspends the rule until the judge can issue a ruling on the merits, however, our interpretation of the judge’s language in the case suggests that he likely will strike down the regulation. If this happens, the Department of Labor will likely appeal, however, even if the rule survived a legal challenge, it could be overturned by legislation passed by Congress or withdrawn by the Trump administration.
As many of our clients know, Innovative has spoken extensively on the FLSA topic at our lunch events and has collaborated with clients to better prepare their employees for this change. Many employers have already begun implementation of these overtime rules and this block may cause employers to delay this implementation. Although the fate of the FLSA overtime rule is not clear at this time, employers are welcome to contact our office with any questions and to discuss the best practice for their business and their employees.

To read Judge Mazzant’s opinion, please click here.

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