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Federal Judge Blocks New FLSA Overtime Rule

Earlier this week, a federal judge issued an injunction halting a new Fair Labor Standards Act rule. Introduced by the Obama administration and set to take effect Dec. 1, the rule would have increased the overtime threshold to $47,476 from $23,660, entitling 4 million workers to overtime pay.
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U.S. District Judge Amos Mazzant III ruled that in raising the minimum salary level for exempt workers, the Department “exceeds its delegated authority and ignores Congress’s intent such that it supplants the duties test.” (The “duties test” refers to one of the conditions that determine which workers are exempt from overtime rules.)

“The decision seems to mean that it’s up to lawmakers in Congress to amend the Fair Labor Standards Act if they want to raise the salary threshold for automatic overtime eligibility from the current level, about $24,000 per year,” explained Chris Opfer, Tyrone Richardson, and Ben Penn at the Daily Labor Report. “But President-elect Donald Trump’s administration is expected to also consider publishing a new regulation to either tweak the one on hold or scrap it altogether.”

The plaintiffs in the case included Nevada and 20 other states. Various business groups were also opposed to expanding overtime pay.

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What Happens Next?

The Department of Labor issued a statement shortly after the injunction, saying:

The Department strongly disagrees with the decision by the court, which has the effect of delaying a fair day’s pay for a long day’s work for millions of hardworking Americans. The Department’s Overtime Final Rule is the result of a comprehensive, inclusive rule-making process, and we remain confident in the legality of all aspects of the rule. We are currently considering all of our legal options.

If the DOL decides to appeal, they’ll have to go through the 5th District Court, which the LA Times characterized as “the nation’s most conservative federal appellate court.” That obviously doesn’t bode well for an interpretation that favors expanding overtime protections.

On the other hand, at The Times points out, there’s 70-plus years of history to consider.

“…using salary as one of the determining factors has now been on the books for more than 70 years, under administrations Democratic and Republican,” writes The LA Times Editorial Board. “If Congress objected to the Labor Department using salary as a factor in determining exemptions, it has had ample time to do so and amend the laws to state categorically that it didn’t want salary used. Congress’ lack of action affirms its intent to exempt some work from overtime protections, and to let the secretary of Labor determine how to do it.”

Tell Us What You Think

What’s your take on this ruling? We want to hear from you. Tell us your thoughts in the comments or join the conversation on Twitter.

Jen Hubley Luckwaldt
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19 Comments on "Federal Judge Blocks New FLSA Overtime Rule"

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Zayda
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The company I work for is still implementing this starting December 1st.

Laurie
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You will get a notification from your company saying it’s on hold. They can’t implement something that isn’t a law right now.

Dave
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I have to disagree, they can raise their minimum wage if they want to regardless of the change in the law. Many companies are lowering commissions for sales people and increasing the minimum wage which makes them more competitive with new hires.

EZE
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I just received the very hold notification you mentioned. Very disheartening.

Ninu
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I know several companies that went ahead and implemented the new standards. Wish ours would too.

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