Many employers have been preparing for the United States Department of Labor’s (the “DOL”) new federal overtime rule, which was set to double the salary threshold exemption from overtime pay under the Fair Labor Standards Act from $23,660 per year to $47,476 per year effective December 1, 2016. However, a Texas federal judge blocked the rule on November 22, 2016 by issuing a preliminary injunction finding that the DOL exceeded its authority by raising the salary threshold too high and by providing for automatic adjustments to the threshold every three years. As a result, the DOL is now enjoined from implementing and enforcing the rule pending further order of the courts.
The case is State of Nevada et al v. United States Department of Labor et al., Case No.: 4:16-CV-00731, United States District Court for the Eastern District of Texas
What’s the fallout? For now, the overtime rule will not take effect as planned December 1, but it could still be implemented later down the road. Thus, employers may continue to follow the existing overtime regulations until a decision is reached.