Texas Judge Blocks New Overtime Rule
INARF’s national partner SUPRA has shared the following update:
Businesses and most non-profits across the country were jubilant with the announcement that a Texas Judge, Amos L. Mazzant, III, enjoined the Federal government from implementing and enforcing the new controversial overtime rule scheduled to go into effect on December 1, 2016. The impact relieves a number of companies (including SUPRA work center affiliates) from paying overtime to employees who make salaries up to $47,476 annually or $913 per week. Previously, employees were exempt from overtime provisions if they made $23,660 annually or $455 per week and met the “duties tests.” In addition, the new rule would have required adjustments to those salaries every three years beginning on January 1, 2020. Interestingly, Judge Mazzant, was appointed by President Barack Obama.
Judge Mazzant's ruling, although not a final decision, reflects his belief that the plaintiffs (a group of 21 states) are likely to succeed on the merits of their challenge to the DOL rule. This is because, the judge wrote, the DOL lacked Congressional authority to effectively supplant a salary requirement with the executive, administrative and professional duties that make an employee exempt from overtime requirements.
The next decision in this litigation is uncertain but the DOL’s prospects for success in front of the Texas court are clearly in doubt. It is unclear what actions, if any, the Trump administration will take next year. It is SUPRA’s understanding that a number of new Rules and Regulations promulgated in the last 90 days of President Obama’s administration will be scrutinized and may be revised.
According to some labor lawyers, employers who have already announced or implemented changes may, depending on the circumstances, reverse course. Employers who have made no changes to their employees' pay or exempt status are free for the moment to ignore the DOL's final rule, but they should remain alert for the court's final ruling in the litigation and any Congressional action.
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