Federal Court Puts New Overtime Rules On Hold

On November 22, 2016, a federal district court in Texas issued an preliminary injunction pausing the implementation of the new overtime rules set to go into effect on December 1, 2016.  The overtime rules significantly raised the salary requirements for employees to be exempt from overtime under the EAP (executive, administrative, professional) exemption.  You can read my post about that here.

The preliminary injunction does not permanently stop the rules – it is a temporary brake.  The judge’s order is the first in what is likely a series of legal challenges and decisions.  We can expect the US Department of Labor (“DOL”) to challenge the judge’s preliminary injunction with some form of an expedited appeal.  Meanwhile, though, the judge’s order puts a break on the new salary requirements.

Employers should avoid a knee-jerk reaction to the injunction.  Whether to put any changes on hold, or to keep or remove any changes already made, should be done carefully.  Both the legalities and business considerations (such as the affect on employee morale) must be considered.  Employers also should stay alert in case the judge’s order changes, the order itself is suspended, or is reversed.  An employer that does not pay attention does so at that employer’s peril.

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Have a happy Thanksgiving!

This post provides general information only.  This post is not intended to create an attorney-client relationship or to be legal advice about your situation.  Laws change and your situation may be different.  You should consult with a licensed attorney for legal advice specific to your circumstances.

© 2016 Matthew D. Macy