Blocking the New Overtime Salary Threshold? Hearing on Request for an Injunction Scheduled for November

A hearing has been scheduled for November 16, 2016 in a Texas federal court to decide whether an injunction will be issued to block the substantially increased salary threshold to qualify as exempt under the new overtime rule, which is anticipated to take effect on December 1, 2016.

The hearing was requested by groups challenging the soon-to-be effective new overtime rule.

As background, last month two lawsuits were filed in Texas seeking to halt or delay implementation of the overtime rule, which more than doubles the minimum salary level under current overtime regulations. One lawsuit, filed by 21 state governments, challenges the constitutionality of the regulations issued by the federal Wage and Hour Division (WHD) of the U.S. Department of Labor (DOL). The second lawsuit, filed by a consortium of fifty-five business groups, including the U.S. Chamber of Commerce, argues that the DOL exceeded its statutory authority, particularly relative to the automatic increase or “indexing” in the salary level every three years.

The two lawsuits both have been assigned to the same a federal judge in Texas. A request has been made, but not yet acted upon, to consolidate the two cases.

While the request for an injunction blocking or delaying the effective date of the new overtime rule is not surprising—other similar efforts were introduced in Congress—the timing of the request so close to the December 1 effective date does not help employers that are struggling to make compensation decisions right now. With one eye on the clock, we encourage employers to continue with their plans to meet the December 1 deadline.

Ogletree Deakins’ Overtime Solutions Center offers employers many resources for meeting the upcoming deadline and reviewing their current exempt classifications, including action items employers can take now to prepare for the effective date and resources for communicating changes to employees.