Federal Judge Issues Nationwide Injunction Against Recent Department of Labor Overtime Rule
A federal district court judge in Texas issued a nationwide injunction blocking the Department of Labor’s recent changes to the Department of Labor’s overtime pay rules. The changes would have doubled the salary level at which hourly workers must be paid extra to be exempt from overtime pay (from $23,660 to $47,476). It was projected that the changes would have required overtime pay for an additional four (4) million additional workers.
The nationwide injunction was issued because the judge determined that the plaintiffs (twenty-one (21) states and more than fifty (50) business groups) stand a significant chance of prevailing in the lawsuit which seeks to overturn the rule and would suffer serious financial harm if the rule was put into effect as scheduled on December 1, 2016. The judge’s decision finds that the Department of Labor and the Obama Administration overstepped their authority by raising the salary cap below which all workers must receive overtime pay from $455 a week to $921 a week.
The judge rejected the argument that the raising of the salary cap simply allows wage rules to keep up “with our modern economy.” The decision noted that the rule effectively eliminated the overtime exception in labor law for “bona fide executive, administrative or professional” employees. As a result, the new rule essentially eliminated the need to examine the duties of employees to determine who fit within the overtime exception, which thwarts the intent of Congress. The judge held as follows: “the Department exceeds its delegated authority and ignores Congress’ intent by raising the minimum salary level such that it supplants the duties test.”
The injunction halts enforcement of the recent overtime rule unless a countermanding order is issued from a federal appeals court. The rule is also subject to reversal by the incoming Trump Administration.
If you have concerns about this or any other labor or employment issue, please contact David Ryan at email@example.com or by telephone at 860.460.7139 (mobile) or 203.752.9794 (office).