On November 22, 2016, Judge Amos L. Mazzant of the Eastern District of Texas issued a nationwide, preliminary injunction halting the Department of Labor overtime regulations scheduled to go into effect on December 1, 2016. Followers of our blog will recall reading about these regulations here and here. Most notably, Judge Mazzant’s decision means that, for now, the salary level threshold will not increase to $47,892 annually (or $921 per week) and the prior level of $23,660 annually (or $455 per week) will remain intact.
In general summary, Judge Mazzant ruled that, at this stage, it appears to him that DOL went farther than its authority under the Fair Labor Standards Act allowed in raising the salary threshold to $47,892 annually. In his memorandum opinion, Judge Mazzant explained, “With the Final Rule, the Department exceeds its delegated authority and ignores Congress’s intent by raising the minimum salary level such that it supplants the duties test.”
While employers across the country are hailing the decision, they are not out of the woods yet in dealing with this issue. Many of our readers have been planning for the new regulations to go into effect December 1, 2016. This has meant not only making decisions on whether to limit employee hours to increase employee compensation, but these plans probably have been communicated to employees by now. How you react in your workplace largely requires decisions based on business and employee morale concerns, as opposed to raising legal issues. Employers may decide to keep their planned changes in place or you may revert back to the status quo. However, after December 1, 2016, employees who currently qualify for exemption from overtime under the salary standard of $23,660 will continue to do so without any change to compensation.
Additionally, employers should continue to pay attention to this issue. Judge Mazzant’s order was a preliminary injunction. This means that based on the evidence and arguments presented thus far, he believes that the parties opposing the new DOL regulations are likely to ultimately prevail. However, his opinion could change in a final decision or DOL could seek an expedited appeal. Either way, it is unlikely, though not impossible, that the overtime regulations could still go into effect at a later date.
There is also the matter of the recent presidential election. In case you haven’t heard, Donald Trump was elected the 45th President of the United States. While most pundits anticipate his will be a business-friendly administration, his campaign was light on any details of how he viewed these new regulations. The most that we learned during the campaign appeared to be that he did not oppose the regulations outright but would seek to exempt small businesses or introduce the increases gradually. Whether he seeks to reintroduce them in another form or continue the litigation to defend them remains to be seen.