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Legal Updates

Thanksgiving Surprise for Employers– Revised Overtime Rule's Implementation Stalled

Labor & Employment Legal Update

A federal district court in Texas has issued a nationwide preliminary injunction prohibiting the Department of Labor from implementing its revised overtime rule, which was scheduled to take effect December 1. The final rule was poised to double the salary level required for employees to be exempt from overtime under the Fair Labor Standards Act.
The decision comes out of a motion from the plaintiffs in a consolidated lawsuit, originally filed by the U.S. Chamber of Commerce and other business groups, as well as one filed by 21 separate states. Judges generally do not issue such injunctions unless they think the underlying case has a substantial likelihood of succeeding, and this court admonished that the rule change "is contrary to the statutory text and Congress's intent" and that "Congress, not the (DOL) should make (the) change."
This ruling does not mean that the DOL’s new overtime rule is invalid. It simply will not go into effect until the court determines the merits of the underlying case. It could be overruled, it could go into effect at a later date, or it could be modified before implementation.
Given that the injunction was issued so late, many employers may have already informed affected employees of pay changes. These changes can certainly stay in place, or employers have the option to roll back their plans until the court reaches a final decision.
Click here to view the court's opinion.  

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