UPDATE: Halt! – Court Puts The DOL’s Overtime Exemption Rule On Hold

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UPDATE: Halt! – Court Puts The DOL’s Overtime Exemption Rule On Hold

 By:Gregory Blueford

On November 22, 2016, a U.S. District Court in Texas granted a nationwide preliminary injunction which blocks the Department of Labor’s (“DOL”) overtime exemption rule. As a refresher,  twenty-one states, including Arizona and Nevada, sped in and filed an emergency motion seeking a preliminary injunction contesting the constitutionality of the Department of Labor’s (“DOL”) “new rule,” which expands overtime protections for “white collar” workers under the Fair Labor Standards Act (“FLSA”). The “new rule” raises the salary threshold for the white collar exemption to $47,476. You can find our previous article HERE.

The Court, siding with the twenty-one (21) states, stated the DOL exceeded its authority granted by Congress by establishing the “new rule.” Specifically, the Court held that the DOL is allowed to define which workers are considered salaried, but only based on the duties they perform, not how much they earn. The Court stated that the rule is contrary to Congress’ intent and “Congress, and not the [DOL], should make that change.”

The Court ruled that the states had shown a likelihood of success in their challenge to the rule as well as an “irreparable harm” if the rule, scheduled to go into effect on December 1, 2016, was implemented before a full review could be heard. In addition, the Court ruled the DOL failed to show it would be harmed in any way if the rule’s implementation was delayed.  


Employers can breathe easy for the time being as this rule is now on hold indefinitely, until the Court can issue a ruling on the actual merits of the case. While this rule has been dealt a significant blow, it is in no way dead forever. The Court will now hear legal arguments from both sides as to why this new rule should or should not be implemented. In addition, H.R. 6094, a bill introduced by the House of Representatives, which would delay the rule’s implementation until June 1, 2017, is still making its way through Congress, and may provide an interesting twist should the Court rule in favor of the DOL. We will keep you updated on this legal battle. In the meantime, please contact The Saqui Law Group should you have any questions regarding overtime compensation.


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