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Employment Law Notebook

Another November Surprise: Federal Court Blocks New Overtime Rule From Going Into Effect

Today, the United States District Court for the Eastern District of Texas issued a preliminary injunction to halt the U.S. Department of Labor’s  new overtime rule from going into effect December 1.  As a result of the Court’s decision in State of Nevada, et al vs United States Department of Labor, Civil Action 4:16-CV-00731, the current overtime requirements under the Fair Labor Standards Act will remain in place for employers across the country, at least for now.  At this point it is unclear if the proposed new overtime rule will be permanently blocked by this court at a later stage and/or if the Trump Administration will eliminate the new overtime rule entirely.

The proposed overtime rule would have increased the minimum salary level employers had to pay exempt employees from $23,660 per year to $47,476 per year. It was expected to expand overtime protection to four million more workers and was greatly criticized by businesses of all sizes and many states who could not afford the salary increases.  

In reaching its decision, the Court held that the US Department of Labor “exceeds its delegated authority and ignores Congress’ intent” by raising the minimum salary level so high that many employers would have to pay employees who perform executive, administrative and professional duties overtime simply because they could not afford the salary hike.  For a copy of the decision go to http://www.txed.uscourts.gov/page1.shtml?location=notable.

If you have any questions about overtime requirements, reach out to an attorney at Meyers Fried-Grodin.