Court Blocks Overtime Rule From Becoming Effective December 1

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On Tuesday, November 22, United States District Judge Amos Mazzant of the United States District Court for the Eastern District of Texas issued a temporary nationwide injunction halting the Department of Labor’s (DOL) overtime rule from becoming effective December 1. The final overtime rule was released by the Department of Labor in May 2016.

In his 20 page ruling, he stated “the Department’s salary level under the Final Rule and the automatic updating mechanism are without statutory authority. The Court concludes that the governing statute for the EAP exemption, 29 U.S.C. § 213(a)(1), is plain and unambiguous and no deference is owed to the Department regarding its interpretation.”

In September, two separate legal challenges were filed against the DOL’s overtime rules. In the first challenge, 21 states have joined together to object to the rule, based on its impact on state funds and budgets. In a separate action, the US Chamber of Commerce and more than 50 other national and Texas business groups challenged the rule for violating the Administrative Procedure Act. These cases were consolidated for consideration by Judge Mazzant.

This injunction is temporary and suspends the overtime regulations until Judge Mazzant can issue a complete ruling on the full merits of the case. However, it is likely that this means the end for this regulation as legal consideration will extend into the next Presidential Administration. The incoming Trump Administration has already indicated that it plans to roll back many of the onerous regulations issued by the DOL under the Obama Administration. It can withdraw defense of this case by the DOL, which would effectively end the regulation. It also gives time for Congress to act legislatively to remedy the measure as well.

Stay tuned!

Posted by Will Flourance at 11/23/2016 09:45:34 AM |