Federal Judge Suspends New Overtime Rule

Last week, Judge Amos L. Mazzant with the U.S. District Court for the Eastern District of Texas, issued an order granting a preliminary injunction to halt the implementation of the U.S. Department of Labor’s (DOL) new overtime compensation regulations in their entirety, which were slated to take effect December 1, 2016. The injunction was sought by numerous trade associations, businesses and 21 states. Finalized last May, the new rule would have included:

 

• Raising the salary threshold for overtime pay from $455/week or $23,660 to $913/week or rather $47,476 per year (which is less than the proposed $50,440 or $970/week); 

• Increasing the highly-compensated employee threshold from $100,000 to $134,004;

• Updating the salary threshold every three years, starting in 2020 (will be tied to the 40th percentile of full-time salaried workers in the lowest income region of the country); 

• Amending the salary basis test to allow employers to use nondiscretionary bonuses and incentive payments (commissions) to satisfy up to 10 percent of the new standard salary level; and

• NOT changing the "duties test" for executive, administrative and professional employees (which was originally hinted at in the proposal).

NRMCA worked in concert with the Partnership to Protect Workplace Opportunity (PPWO) to oppose the new rule. Moving forward, it is still unclear if DOL will appeal the injunction. However, being that any appeal will likely extend into the next Administration and the next Administration will have the final say whether the rule is allowed to remain and/or any injunction appeal be allowed to continue, the fate of the DOL’s new overtime rule is likely sealed. President-elect Trump has previously stated his opposition to the rule.