A federal district judge in Texas has issued a temporary injunction blocking implementation of the Overtime Final Rule, ruling that the U.S. Department of Labor (DOL) exceeded its authority. Barring a last-minute appeal, the overtime rule will not go into effect as scheduled on December 1 because of this decision. The Department of Labor and its co-defendants filed a notice of appeal at the Texas court on Dec. 1.
At issue is the question of which employees qualify for an exemption from the requirement under the federal Fair Labor Standards Act (FLSA) that most employees are entitled to time and a half overtime pay for working more than 40 hours in a week. If these rules are eventually enacted, these regulations would require most businesses to pay overtime to full-time employees earning less than $913 per week ($47,476 per year).
Under the Fair Labor Standards Act, employees may be exempt from overtime pay requirements if:
They are paid on a salary basis;
They are paid a salary of at least $455 per week ($23,330 per year), which would have more than doubled under the overtime rule; and
They meet the duties tests as an executive, administrative, or professional employee.
The judge's decision came as a surprise to many employment law attorneys. With the DOL’s appeal of the judge's decision, it remains possible that the rules could go into effect at a later date — although the incoming Trump administration has threatened to scrap the rules. For now, the court ruling means that no immediate changes are needed to comply with the overtime rules.