A federal court in Texas has temporarily blocked implementation of the Department of Labor’s (DOL) controversial new overtime rule, which was scheduled to go into effect on December 1, 2016. The now-on-hold rule would more than double the minimum salary under which salaried employees would be automatically eligible for overtime pay under the Fair Labor Standards Act (FLSA) from $455 a week ($23,660 per year) to $913 per week ($47,476 per year).
In granting the preliminary injunction sought by the state of Nevada and 20 other states that challenged the rule, the court found that DOL likely had exceeded its statutory authority to interpret the FLSA. In particular, by more than doubling the minimum salary test for automatically qualifying an employee for overtime regardless of the employee’s job duties, the court found that DOL essentially created “a de facto salary-only test,” in direct contravention of congressional intent.
As a result of the court’s November 22 order, nationwide enforcement of the new overtime rule is on hold until the court issues a ruling on the merits of the challenge. Although the government appealed the court’s preliminary injunction to the Fifth Circuit Court of Appeals on December 1, 2016, it is highly unlikely that a ruling on that appeal would take place before the new administration assumes office in January. At this point, it is unclear how the new administration would then proceed.
Members of the Equal Employment Advisory Council (EEAC) can read more here.