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Federal Court Blocks Implementation of Overtime Rule
November 22, 2016
Earlier today, November 22, 2016, a Texas federal judge entered a nationwide injunction blocking the Department of Labor's revisions to the overtime rule -- mainly the increase in the salary basis -- that was set to go into effect December 1. Judge Amos Mazzant from the Eastern District of Texas, a 2014 Obama appointee, held that the Department of Labor's proposed increase in the salary basis test for white collar exemptions under the Fair Labor Standards Act from $23,660 to $47,476 was such a significant increase that it supplants Congress' original intent in creating white collar exemptions that were to be defined by the duties of the employee.
With the issuance of this injunction, employers across the United States will receive at least a temporary reprieve from the implementation of the Overtime Rule. However, this ruling does not necessarily mean the Overtime Rule has been blocked permanently. As this was only a preliminary injunction, future legal proceedings are expected, which could include an immediate interlocutory appeal to the Fifth Circuit Court of Appeals, who could affirm or overturn the lower court's injunction. Regardless, the ultimate future of the Overtime Rule likely is to be decided by the incoming Trump Administration.
We will continue to monitor this matter. In the interim, contact Spilman with questions about the impact of this ruling.
