A federal judge has issued a preliminary injunction stopping new overtime laws that were to go into effect December 1 from proceeding at this time.
The U.S. District Court in the Eastern District of Texas granted a nationwide preliminary injunction on November 22, 2016, saying the Department of Labor’s rule exceeds the authority the agency was delegated by Congress.
While we expect the Department of Labor will fight the injunction and appeal the decision, the delay most likely means that the overtime laws will not go into effect before the change in presidential administration in January. That change and possible other policy changes could mean an end to the increase in the overtime exemption amounts. For now, it appears that the December 1 implementation of the overtime adjustments cannot take place.
The order provides that pending further legal action, the December 1, 2016, implementation date of the Final Rule is postponed and employers need not adjust salaries upward in order to continue to claim exempt status at this time (italics added). Competing injunction motions could be filed by the Department of Labor seeking to overturn the ruling before December 1. That remains to be seen. We will update this notice if anything changes before then.
Keith Mier and I are available for questions anytime: 505-883-3395 or 505-883-3385, respectively.