New Overtime Rule Halted by Federal Judge

In a surprising move, the new overtime rule, scheduled to raise the minimum salary threshold for exempt employees on December 1, 2016, has been blocked by Texas Judge Amos L. Mazzant III just ten days before the scheduled effective date.

After the new rule was announced, usdol_seal_circa_2015_svg21 states filed a lawsuit against the Department of Labor. The case was consolidated with another lawsuit filed by the U.S. Chamber of Commerce and other business groups which also objected to the new regulation.

Even after the lawsuits were filed and consolidated, it was not expected that a decision would be made prior the December 1st effective date.  Many are surprised by the decision made by Judge Mazzant who was appointed by President Obama.

The decision to block the rule, a preliminary injunction, doesn’t completely eliminate the rule, but rather delays the implementation until the court has a chance to further review whether the Department of Labor exceeded its authority by raising the minimum salary threshold for exempt employees too high.  There is a chance, especially after president-elect Donald Trump takes office, that the rule could be overhauled or eliminated completely, but employers should prepare for the chance that the rule is implemented in the future.

At this time, and until further notice, the minimum salary for exempt employees will remain at $455 per week instead of changing to the scheduled $913 per week on December 1st.