>> Payroll/Personnel

Federal Overtime Changes Effective Dec. 1, 2016, Blocked by Court

On Nov. 22, 2016, a federal district court in Texas enjoined nationwide implementation of the Labor Department’s final overtime rule that was scheduled to go into effect on Dec. 1.

Judge Amos Mazzant, ruling on a consolidated lawsuit brought by 21 states and a business coalition, concluded that the executive, administrative or professional employee exemption contained in FLSA Sec. 13(a)(1) does not grant the Department the authority to utilize a salary-level test or an automatic salary updating mechanism under the rule.

Agencies and institutions should refrain from making any FLSA and overtime exemption changes related to this rule until further direction is received.

“With the Final Rule, the Department exceeds its delegated authority and ignores Congress’s intent by raising the minimum salary level such that it supplants the duties test. Consequently, the Final Rule does not meet [step one of the] Chevron [deference test] and is unlawful,” the court ruled (State of Nevada, et al v. Dept. of Labor, et al, Dkt. No. 4:16-CV-00731, Nov. 22, 2016).

Changes to this document
11/30/2016 Updated page to reflect federal court order overturning Executive order.