The new overtime salary requirement will not go into effect on December 1, 2016. A federal judge in Texas today issued a preliminary injunction in a challenge to the U.S. Department of Labor’s (DOL’s) new overtime salary threshold. Judge Amos L. Mazzant, III, of the U.S. District Court for the Eastern District of Texas, Sherman division, ruled that the DOL does not have the authority to utilize a salary-level test or an automatic updating mechanism under the final rule.
The nationwide injunction means that the DOL rule which doubled the salary requirement for the white collar exemptions from $455 to $913 per week will not go into effect on December 1, 2016, as scheduled.
OT Changes Are Delayed, Not Necessarily Dead
Two lawsuits were filed in the Texas court seeking to stop the new overtime rule from becoming effective. The first one was brought by twenty-one states and the second by numerous business associations. The two cases were consolidated and will proceed before Judge Mazzant.
By granting the preliminary injunction, the judge has delayed the rule from becoming effective until further legal proceedings may occur. The court will need to rule on whether the injunction becomes permanent. The business parties’ motion for summary judgment, which seeks to throw out the final rule for good, has already been briefed and may be decided on an expedited basis.
Stay tuned as we will provide further analysis of the court’s ruling.
This publication is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal or financial advice nor do they necessarily reflect the views of Holland & Hart LLP or any of its attorneys other than the author(s). This publication is not intended to create an attorney-client relationship between you and Holland & Hart LLP. Substantive changes in the law subsequent to the date of this publication might affect the analysis or commentary. Similarly, the analysis may differ depending on the jurisdiction or circumstances. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.