NEWS ALERT: JUDGE STRIKES DOWN NEW OVERTIME RULE AS UNLAWFUL

Yesterday, in a shocking decision, and a stern rebuke to the Obama administration, a United States federal court judge in Texas struck down the Department of Labor’s (DOL) new overtime rule that was set to go into effect on December 1.

This brief HR Law Insider article explains all you need to know about the judge’s decision and its huge impact on businesses throughout the nation.

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OVER 20 STATES SUED THE DOL TO KILL THE NEW OVERTIME RULE

The DOL’s much ballyhooed regulation that was to raise the salary limit below which workers automatically qualified for overtime pay to $47,476 from $23,660 was set to go into full force and effect on December 1.

However, months ago over 20 states sued the DOL arguing, among other things, that the DOL exceeded its authority in enacting the new regulations.  The states contended that Congress’ law — the Fair Labor Standards Act (FLSA) — could not be changed by a fiat of the DOL.  In other words, the states contended that the Obama administration’s DOL exceeded its authority.

THE NEW OVERTIME LAW IS DEAD — FOR NOW

Judge Amos L. Mazzant III of the Eastern District of Texas ruled that the DOL has indeed exceeded its authority by raising the overtime salary limit.  The judge promptly enjoined (i.e. stopped) the DOL rule from going forward not only in Texas, but nationwide.

Understand, the court’s injunction is a temporary ruling that stops the regulation until the judge can issue a final ruling on the merits.  However, the handwriting is on the wall: the judge is highly likely to strike down the regulation when he issues his final ruling.

Until further notice, the rule increasing the minimum salary threshold of exempt workers to $47,476 from $23,660 is dead.  Businesses need not pay exempt workers more than $23,660 to comply with the FLSA.

Judge Mozzant’s ruling is clearly the first shot across the bow in a changing business landscape.  Expect more such pro-business directives from the incoming Trump administration.  These will inevitably be met with fierce resistance from pro-labor groups.

As the battle rages on, HR Law Insider will be here to provide cutting edge information and commentary to guide businesses, managers, and HR professionals.

For further information on these or other employment, business, and HR matters, contact Art Bourque at Bourque Law Firm.

 

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