November 23, 2016 - Texas Federal Court Blocks New Overtime Regulations

As we reported to you earlier this year, the United States Department of Labor issued new overtime regulations which were scheduled to take effect on December 1 of this year. The new regulations would have substantially increased the minimum salary required to classify employees as exempt from overtime. In September, 23 states filed suit in the Eastern District of Texas, arguing the regulations were unlawful and seeking an injunction to stop them going into effect. Late yesterday, we learned that suit was successful (at least for the moment).

A federal district court entered a nationwide preliminary injunction preventing the Department from implementing and enforcing the new regulations. For any of you who may be curious about the court’s reasoning, very briefly, it was persuaded by the states’ argument that the new regulations effectively (and unlawfully) displace the statutorily-mandated duties tests with a pure salary test.

Although the injunction issued yesterday is not permanent, the pending change in administration may affect how the Department chooses to proceed in the case going forward. We will keep you updated on any further developments but, for now, employers do not need to comply with the new regulations next week.