Court Case

On November 22, 2016, Judge Mazzano of the Eastern District of Texas in the case of State of Nevada, et al., v. United States Department of Labor, et al., 4:26-CV-00731 (November 22, 2016) issued an injunction preventing the Department of Labor overtime regulations.  These regulations were scheduled to go into effect on December 1, 2016. These regulations were already in doubt given President-Elect Trump's promise to reverse regulations instituted under President Obama.  

Background

On March 23, 2014, President Obama issued a memorandum directing the Secretary of Labor to modernize existing overtime regulations for the executive, administrative and professional exemptions.  On May 18, 2016, the United States Department of Labor adopted a new final rule increasing the minimum salary required for employees to qualify as exempt from overtime requirements under the Fair Labor Standards Act (FLSA). This final rule was to become effective December 1, 2016.  It would have changed the minimum salary required for the executive, administrative and professional exemptions from US$455 per week (US$23,660 per year) to US$913 per week (US$47,476 per year) and provided a mechanism for automatic increases to such minimum salary level every three years.

Court Decision

The Judge ruled that the Obama administration had exceeded its authority by increasing the overtime salary limit so significantly. The Court ruled that the Department of Labor's salary level under the Final Rule and the automatic updating mechanism attached to it are not statutorily authorized.  As a result of the Court's decision, the Final Rule is enjoined nationally.