Judge Tells DOL to Cork its Pistol as New Overtime Rule is Blocked
Earlier this year we informed you that the federal Department of Labor intended to raise the minimum salary for individuals classified as executive, administrative, and professional (“white collar”) exempt employees. The result? About 4.2 million workers classified as exempt would become eligible for overtime pay on December 1, 2016, the effective date of the new rule. Businesses would need to pay $47,476 starting on December 1, 2016 to maintain the exempt status of workers.
However, a combination of business groups and states sued to invalidate the regulation, requesting expedited and emergency injunctive relief.
On November 22, 2016, a federal district court in Texas granted the emergency motion for a preliminary injunction barring the DOL from enforcing its new overtime rule. The injunction will remain until the resolution of this legal challenge to the rule. In deciding to issue the injunction, the court stated:
[T]his significant increase to the salary level creates essentially a de facto salary-only test … Congress did not intend salary to categorically exclude an employee with [white collar] duties from the exemption.
Likewise, the automatic increase of the minimum salary level is also unlawful.
This injunction means that the federal exempt salary level requirements will remain the same ($23,660) for the time being.
Sad Enough to Bring a Tear to a Glass Eye
However, if you employ workers in California, employers must pay twice the state minimum wage to employees classified as exempt from overtime. Unfortunately, the minimum salary California employers must pay their exempt employees goes up to $43,680 on January 1, 2017.
This Ain’t the Eastern District of Texas’ First Rodeo
These federal judges out of the Eastern District of Texas sure are busy these days enjoining the DOL. Remember the Fair Pay and Safe Workplaces Executive Order 13673 (Executive Order) which would subject existing and prospective government contractors to a broad new set of record-keeping, reporting and compliance requirements? Well, on October 24, 2016, Eastern District of Texas Judge Marcia Crone granted a nationwide preliminary injunction enjoining implementation of the Blacklisting law.
Specifically, the DOL was enjoined for implementing any portion of the FAR Rule or DOL Guidance relating to the new reporting and disclosure requirements regarding labor law violations as described in Executive Order 13673 and implemented in the FAR Rule and DOL Guidance. Further, the DOL was enjoined from enforcing the restriction on arbitration agreements.
You Can Hang Your Hat on It
These two DOL regulations will not go into effect for some time as these separate lawsuits make their way through the judicial system. When we posted this blog, the DOL had yet to update their webpage on the new overtime regulations but will likely appear here. The DOL has posted notice of the injunction relating to the Blacklisting rule.
The Porch Light’s On But No One’s Home
Actually, I like to think I’m bright as a new penny and smart as a whip. These headings are courtesy of Texas Monthly’s “More Colorful Texas Sayings…622 Wise and Witty Ways to Talk Texan.” That’s all she wrote.
California Construction Law Blog | Nomos LLP 
One Response to “Judge Tells DOL to Cork its Pistol as New Overtime Rule is Blocked”
[…] to $47,476 per year, which is higher than the California minimum wage. While there is currently an injunction preventing enforcement of these regulations, the DOL has requested an expedited […]