The United States District Court for the Eastern District of Texas has entered an order today blocking the Obama Administration’s implementation and enforcement of new overtime regulations that were finalized earlier this year. Specifically, the DOL’s new overtime regulations were to increase the minimum salary an employer must pay to bona fide executive, professional, and administrative employees in order for such employees to be exempt from the minimum wage and overtime provisions of the Fair Labor Standards Act. These new regulations were to become effective on December 1, 2016, but today’s ruling should at least postpone the new rule.
Today’s ruling granted the State of Nevada and twenty other states’ request for a preliminary injunction, meaning that the decision is not a final decision. The issue could be decided differently at trial, as well as on appeal. Moreover, with the impending change of presidential administrations, there has been some speculation that the government might later abandon the new regulations altogether if the current administration is unable to secure a more favorable ruling by early next year.
The court’s 20-page decision lays out the history of the so-called “white-collar” exemptions under the FLSA and, ultimately, concludes that Congress never intended for salary to be a component of any test or definition of an employee’s status as an executive, professional, or administrative employee. And while Congress statutorily granted the Department of Labor some authority to delineate the bounds of these categories of exempt employees, the establishment of a primarily salary-driven test exceeded that authority, the court found.