DOL Overtime Rules Change Blocked by Federal Court

On November 22, 2016, a ruling by the US District Court in Texas granted a nationwide preliminary injunction against the new law, which was to go into effect on December 1. The regulation was set to raise the salary limit from $23,660 to $47,476 for workers who would be eligible for time-and-a-half overtime pay.

The judge said that the administration exceeded its authority by raising the overtime limit so significantly. The Labor Department strongly disagreed with the decision and said it was considering all of its legal options, meaning that there could be an appeal filed while President Obama is still in office. The current dollar limit has been in effect since 2004.

In anticipation of the change, many employers have already made changes to their pay structures, including raising the pay on some employees over the new $47,476 limit after determining that it would be more cost-effective than paying overtime. It may be very difficult to reverse these pay increases, so some employers may be willing to support some sort of compromise on the overtime issue.

We will keep you informed about this matter as updates occur. If you have any questions, please contact us.