FLSA overtime rule blocked by federal court

Editor's note: Please see further updates at our more extensive follow-up here.

Dive Brief:

  • A federal judge in Texas on Tuesday granted a preliminary injunction against the FLSA overtime rule.
  • U.S. District Judge Amos Mazzant said states that challenged the rule were able to effectively show "irreparable harm" if it went into effect, while the Labor Department did not prove it would be harmed if the rule was not implemented, Law360 reported. Mazzant prevented the rule from going into effect Dec. 1, giving employers a reprieve.
  • A lawsuit challenging the rule was filed by 21 states and a variety of employer groups. The rule was set to increase the exemption threshold to $47,476, more than doubling the current threshold.

Dive Insight:

In a surprise decision, the court ruled in favor of a preliminary injunction for the overtime rule, delaying its implementation nationwide.

Many in the employment law field did not think Mazzant, appointed by President Obama, would strike against the rule. Employers' concerns about how to adjust wage and hour processes may have swayed the court. Mazzant had concerns about the automatic updating clause within the rule, which would call for further increases of the threshold after three years had passed, also known as indexing.

Employment law experts can help employers prepare accordingly for what could come next. President-elect Trump has yet to say what his plans are for the overtime rule, though he was previously in support of exceptions for small businesses. The DOL can appeal the ruling, but a Trump administration subsequently could drop any appeal.

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Filed Under: HR Management Legal
Top image credit: Marcin Wichary