New FLSA OT Rule Blocked

IMPORTANT NOTICE – New FLSA Overtime Rule Blocked
November 23, 2016
Source SHRM and BLR

A consolidated lawsuit in a Texas federal court brought by 21 states and a business coalition was granted an injunction blocking the implementation of the U.S. Department of Labor’s (DOL) final FLSA overtime rule, which would have gone into effect December 1, 2016.
The overtime rule was scheduled to take effect Dec. 1 and would have raised the salary threshold from $23,660 to $47,476.

“A preliminary injunction preserves the status quo while the court determines the department’s authority to make the final rule as well as the final rule’s validity,” said Judge Amos Mazzant of the U.S. District Court for the Eastern District of Texas in a Nov. 22 ruling.
“This is a total surprise in many respects, but you have to tip your hat to the judge who made a tough call and hopefully a decision that will stay in place,” said Alfred Robinson Jr., an attorney with Ogletree Deakins in Washington, D.C., and a former acting administrator of the DOL’s Wage and Hour Division.

A preliminary injunction isn’t permanent, as it simply preserves the existing overtime rule. The revised regulation may face an uphill battle: The judge wouldn’t have granted the nationwide preliminary injunction unless, among other things, he thought the states showed a substantial likelihood of succeeding on their claims.

Judge Mazzant noted that the DOL “has admitted that it cannot create an evaluation ‘based on salary alone.” However, “this significant increase to the salary level creates essentially a de facto salary-only test,” he said. “If Congress intended the salary requirement to supplant the duties test, then Congress—and not the department—should make that change.”

The DOL will likely challenge the decision.

Associated Employers will try to keep you advised of further developments.