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Impact of the Preliminary Injunction on the Fair Labor Standards Act Overtime Rule

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In 2016, the U.S. Department of Labor (“DOL”) issued a new rule regarding overtime pay that was to become effective for employers nationwide on December 1, 2016. The rule provided that overtime pay for executive, administrative, and professional employee exemptions under the Fair Labor Standards Act (“FLSA”) be increased to $913 per week ($47,476 per year). The new proposed overtime pay would more than double the current minimum salary requirements.  This new overtime rule was set to become effective on December 1, 2016.

However, on November 22, 2016, Judge Amos Mazzant of the U.S. District Court for the Eastern District of Texas granted a lawsuit brought by 21 states asking that the court issue a preliminary injunction blocking the DOL from implementing this new rule and challenging the DOL’s authority to increase the salary threshold. In issuing his ruling, Judge Mazzant explained, “A preliminary injunction preserves the status quo while the court determines the department’s authority to make the final rule as well as the final rule’s validity.” Accordingly, employers are expected to continue following the former overtime pay rules until a final ruling is issued. Following up on this decision, employees may have several lingering questions they want to clarify as to what this means for the implementation of the new overtime rule.

Does The Court’s Decision Mean The New Overtime Will Not Become Effective?

No. As touched upon by Judge Mazzant’s ruling, a preliminary injunction only temporarily preserves the status quo. This means employers are still expected to follow the current overtime rule until the Court later rules on the merits of the case and makes a final determination regarding the validity and enforceability of the revised rule. Since Judge Mazzant issued its ruling, the DOL has already appealed the decision to the Fifth Circuit Court of Appeals.

When Will The Fifth Circuit Appeal Be Resolved?

This timeline for the overtime rule decision to be resolved by the Fifth Circuit is still unclear. As a new administration is taking office on January 20, 2017, it is unclear whether they will take steps to defend the revised rule.

If the Judge Issued His Ruling in Texas, Does My Florida Employer Have to Follow It?

Yes. Judge Mazzant made it clear that his ruling applied to employers that fall under the FLSA nationwide. Specifically, Judge Mazzant clarified, “A nationwide injunction protects both employees and employers from being subject to different exemptions based on location.” This means an employer may wait to classify an employee that would be non-exempt under the revised rule while they wait for the pending appeal to be resolved.

Contact Us For Assistance

Understanding an employer’s compliance with the existing FLSA overtime laws during the period when the preliminary injunction is in place is difficult. If you believe your employer is violating the FLSA, you should contact the experienced Clearwater employment attorneys of Dilla Employment Law, P.A. to help you understand your rights are protected.

Resource:

dol.gov/whd/overtime/final2016/litigation.htm

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