A Texas federal judge issued an order on Tuesday, Nov. 22, 2016, temporarily blocking the Department of Labor’s new overtime rule. The rule, which was set to take effect on Dec. 1, increased the salary basis test for executive, administrative and professional exempt employees from $23,660 to $47,476. It also included an automatic updating mechanism to increase the salary basis every three years. The rule did not change the duties tests required to meet the exemptions.
In the 20-page opinion, Judge Amos Mazzant reasoned that the DOL’s overtime rule is “contrary to the statutory text and Congress’s intent and Congress, and not the Department, should make that change.” That is, only Congress could increase the salary threshold in the manner the DOL had proposed. The DOL’s authority is limited to establishing and refining the duties tests. Judge Mazzant further opined that the DOL’s salary increase would improperly supplant the duties tests.
Although the court has only temporarily blocked the proposed rule, a permanent injunction could follow. The likely next move will be for the Department of Labor to appeal the decision. It is also possible that the incoming Trump administration could reverse or substantially revise the Obama administration’s rule. Taft's Labor & Employment group will keep you apprised of any updates regarding this rule.
The case is Nevada v U.S. Department of Labor, 16-00731, United States District Court, Eastern District of Texas (Sherman).