Just in time for the holidays! A federal district judge in the Eastern District of Texas has preliminarily enjoined the U.S. Department of Labor from enforcing the controversial new overtime regulation that more than doubles the salary threshold for qualifying as an “exempt” employee under the Fair Labor Standards Act. The injunction applies nationwide.
The order comes in a lawsuit that was filed by 21 states to challenge the DOL’s authority to implement the new regulation. The states sought an emergency preliminary injunction in the face of the quickly-approaching December 1 effective date for the new regulation. The court found that the new salary threshold was raised to such a degree that it essentially supplants the “duties” test and renders employees who actually do perform executive, administrative, and professional work “non-exempt” simply because their salary is not high enough, in contravention of Congressional intent when it enacted the FLSA overtime laws. The court found that a nationwide injunction was proper to maintain the status quo while the court considers the merits of whether the regulation exceeded the DOL’s rulemaking power. If the court finds that the regulation exceeded the DOL’s rulemaking power, the regulation will be declared invalid.
The injunction remains in effect until further order of the court. While no one knows exactly how long that will be, it is likely that the injunction will remain in effect through the holidays and the end of the year. This should provide businesses with a bit of relief as the year winds down. Happy holidays!
For more information you can contact Attorney Theresa A. Phelps.