Texas Federal Court Blocks Mandatory Overtime for High Salaried Workers

The U. S. District Court for the Eastern District of Texas has issued a nationwide injunction against enforcement of the Obama administration’s rule, set to go into effect December 1, that would mandated overtime pay for salaried employees earning less than $47,426.00 annually, as opposed to the current overtime standard of $23,660.00. The court ruled that the Department of Labor regulation was unauthorized by the Fair Labor Standards Act because it substituted salary level alone for consideration of employment duties in determining whether salaried employees are or are not hourly workers.

The court also held the Department of Labor lacks authority to insert automatic upward salary adjustments in the new rule, because the automatic adjustment provision eliminates the notice and comment period required by the Act before implementing new regulations.

Twenty state governments and fifty business organizations brought the lawsuit challenging the rule. It seems highly unlikely that the Trump administration Department of Labor will pursue efforts to enforce or revise the rule after inauguration of the new President in January.