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Federal Judge Prevents Implementation of DOL Final Overtime Rule

On November 22, 2016, a Texas federal judge issued a nationwide preliminary injunction which prevents the Department of Labor's new overtime rules, known as the Final Rule, from taking effect on December 1, 2016.

The Department of Labor's (DOL) Final Rule would have doubled the exemption threshold for overtime pay from $23,660 a year to $47,476 for most salaried workers. The change would have required most businesses and many nonprofit organizations to pay time-and-a-half for more than 40 hours per week by those employees making less than $47,476 per year.

However, U.S. District Judge Amos Mazzant found that the State Plaintiffs, a group of states that did not include Pennsylvania, met their burden for a preliminary injunction to stop the Final Rule from going into effect next week.

The Court held that the statute under which the "white collar" salary exemption comes, is plain and unambiguous, and that it is Congress, not the DOL, who has the ability to make the changes laid out in the Final Rule. The Court also held that the Final Rule made a "de facto salary test" that is at odds with Congress' intention and exceeds the DOL's authority.

One of the questions that must be answered in issuing a preliminary injunction is if the injunction is in the public's best interest. Judge Mazzant held that if the State Plaintiffs proved their case, the implementation of the Rule, and the subsequent need to undo it, would greatly harm the public- particularly by costing the public, including the States, millions. Whereas, if the Defendants show the Final Rule is lawful and it is eventually implemented then there would be no harm caused by the injunction, only a delay, during which the current rules would apply. The Court also found that because the Final Rule would affect employers and employees in all states a nationwide enjoinment was necessary.

For assistance with overtime or other employment issues contact Kisner Law Firm.

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