The new overtime rule will not take effect on December 1, 2016 as expected. A federal judge has blocked the Obama administration rule which would have extended mandatory overtime pay to more than 4 million salaried workers.
The new rule was issued by the Department of Labor and would have brought the maximum salary number a worker can earn and still be eligible for mandatory overtime pay up to $47,500.
The ruling was made by U.S. District Judge Amos Mazzant who sits on the bench in Sherman, Texas. His motion for a nationwide injunction backs the sentiments of 21 states and many business groups who felt the new overtime rule was unlawful. Judge Mazzant ruled that the federal law governing overtime does not allow the Department of Labor to determine which workers are eligible for overtime pay based on just salary levels.
While the states and business groups that fought the new rule are pleased with the ruling, the Department of Labor is not. They are reportedly considering all of their options in light of the new ruling. They can appeal the ruling to the New Orleans-based 5th U.S. Circuit Court of Appeals. We will keep you posted on any and all proceedings and developments.
Employers across virtually every industry have been preparing for the new overtime rule for months. This new ruling brings those preparations to a halt, at least for now. It may also create questions for business owners and their employees. Please reach out to us for any assistance that you may need. We would be happy to help.