On November 21, 2016, a federal judge in Texas issued a nationwide injunction blocking the Department of Labor’s new overtime rule, which sought to expand the obligations of employers to pay overtime by, among other things, doubling the minimum salary threshold for the “white-collar” exemption under the FLSA. The decision brings relief to employers who were bracing themselves for the rule’s December 1, 2016 effective date.
The Judge’s ruling was the culmination of a federal lawsuit brought by twenty-one states and a coalition of business organizations. In making his decision, the Judge noted, “the Department exceeds its delegated authority and ignores Congress’s intent by raising the minimum salary level such that it supplants the duties test.”
With a new Trump administration in tow, observers will be watching closely to see what, if anything, the Department will do in response to the decision. For now, employers can breathe a sigh of relief. If implemented, the regulation would have carried a huge economic impact by requiring employers nationwide to pay an estimated $12 billion in new wages to their employees.
For more information about this decision, please contact the attorneys in our Labor & Employment Group.
Marc Furman is the Chair of the Labor & Employment Group at Cohen Seglias, as well as a Shareholder and a member of the Board of Directors. For more than 30 years, Marc has limited his practice to providing representation and counsel to both union and non-union employers throughout the United States in all aspects of labor and employment law.
Joshua A. Brand is an Associate in the Philadelphia Office of Cohen Seglias and a member of the Firm’s Labor & Employment Group. He represents employers in both federal and state courts in a variety of employment-related matters, including discrimination, harassment, and retaliation claims.