BREAKING NEWS: DOL’S Overtime Rule Blocked By Texas Judge
Yesterday, a federal district court in Texas granted an emergency injunction preventing the U.S. Department of Labor’s new overtime rule from taking effect. The ruling was issued in a lawsuit, brought against the Department in September by 21 states and the U.S. Chamber of Commerce, seeking judicial review of the Department’s new overtime rule. The new rule was scheduled to take effect on December 1, 2016, and would raise the minimum salary level for exempt employees from $455 per week to $913 per week, as well as institute an automatic increase to the minimum salary level every three years. The nationwide injunction means that employers in all 50 states, including New Mexico, are under no legal obligation to comply with the new overtime rule. The court ruled that, because the Department had likely overstepped its statutory authority, the states would likely prevail in their challenge and thus a preliminary injunction was appropriate even though the case has not yet proceeded to trial.
The court’s reasoning for its decision is likely inconsequential as the Trump administration has made indications that it would repeal the rule anyway. If the Department of Labor appeals the injunction, the appeal is not likely to be resolved prior to President-Elect Trump taking office in January 2017. Once that occurs, whomever President Trump appoints to head up the Department will likely drop the appeal and yesterday’s injunction will remain in place. Similarly, the matter will not be resolved at trial prior to President-Elect Trump’s inauguration, meaning Trump’s appointee will likely drop the case at the earliest opportunity. In short, the new overtime rule is likely dead for the foreseeable future, though the incoming administration will have wide latitude in determining what, if any, regulations it will promulgate in its place.
If you have any questions about the effect of this development on any plans that were implemented to comply with the new overtime rule, please contact one of our attorneys below for assistance.
Contact Barbara Stephenson, Quentin Smith, or Brian McMath: