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Nationwide Injunction Prohibits New FLSA Overtime Regulations

overtime law.jpgIn May of 2016, President Obama and the Department of Labor (DOL) announced new FLSA overtime rules. At the time of the announcement, these rules were set to go into effect on December 1st, 2016. However, there was immediate controversy regarding this DOL regulation. Indeed, several states filed lawsuits against the agency seeking to block the implement of the new overtime regulations. The legal argument was that the DOL exceeded its legal authority in promulgating these regulations.

At least one federal judge agrees. On November 16th, Judge Amos Mazzant III for the Eastern District of Texas released a nationwide preliminary injunction that puts a temporary stop to the implementation of these new overtime regulations.

Understanding the DOL's Proposed Overtime Regulations

The Fair Labor Standards Act (FLSA) sets the overtime rules for employees throughout the United States. However, the legislation also exempts certain workers from its rules. Specifically, workers can be exempted if they:

  • Have specialized training;
  • Engage primarily in administrative tasks; or
  • Engage primarily in executive tasks.

Additionally, in order to be legally exempted, workers must make enough money. Under the current rules, workers must make at least $455 per week to be eligible for exemption. The new DOL overtime regulations were set to dramatically increase this minimum required salary level to $921 per week.

Why a Federal Judge Temporarily Blocked Implementation

In the United States, Congress makes policy and executive agencies, such as the DOL, implement that policy. This means that the Department of Labor is tasked with implementing the intentions of Congress. Officials from the DOL believed that they had the legal ability to craft new overtime rules because the modern economy has changed. Therefore, new rules were necessary to ensure that the implementation of the FLSA was consistent with the original intentions of Congress. However, Judge Mazzant was not convinced that raising the minimum salary threshold was justified. Instead, the judge noted that only Congress had the authority to take that action, as it amounted to making new policy.

What Happens Now?

It is important to reiterate the fact that this is only a temporary injunction. While this decision is incredibly important and puts the DOL overtime regulation in serious jeopardy, this is not a final ruling. There is little doubt that this decision will quickly be appealed by the DOL and related defendants. For the time being, the future of this regulation is up in the air. At the very least, employers will have more time to consider how they will adapt their business operations to these regulations. Affected businesses must continue to follow any updates regarding this issue.

Contact Our Office Today

At Diemer, Whitman & Cardosi, LLP, our San Jose employment law attorneys have extensive experience handling labor law compliance issues. If your company is in need of legal assistance, please get in touch with our team today by calling (408) 971-6270. Initial legal consultations are free of charge. We proudly represent businesses throughout Silicon Valley, including in Mountain View, San Francisco and Palo Alto.

Sources:

https://www.dol.gov/whd/overtime/final2016/

http://www.npr.org/sections/thetwo-way/2016/11/22/503081151/federal-judge-blocks-obama-administrations-overtime-pay-rule

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