Court blocks overtime regulation

by Mandy Hicks

By Michael Owsley, attorney and partner

clock with numbers smallerOn Tuesday, the U. S. District Court for the Eastern District of Texas issued a memorandum opinion and preliminary injunction barring the United States Department of Labor from implementing and enforcing the change in overtime pay regulations scheduled to be effective December 1.

The Court determined that the Department of Labor does not have the authority to utilize a salary-level test or automatic updating mechanism as the action exceeded its statutory authority, and specifically enjoined the Department of Labor from enforcing and implementing the regulation on a nationwide basis.

Most employers have already taken steps to implement the regulation effective December 1. Those steps were to increase the minimum salary level for exempt employees from $455 per week ($23,660 annually) to $921 per week ($47,892 annually) or to re-classify employees from exempt to nonexempt.

Employers are no longer obligated to implement this minimum salary level for exempt employees. While employees still have to meet the test for “executive,” “administrative,” and “professional” employees based on the duties they perform, the new salary test will not go into effect December 1. Employers will need to consider what action to take now with respect to advising employees and how they will be impacted by this decision.

This decision is preliminary, which means it could change at some point in the future.

If you have questions, contact attorneys Michael A. Owsley, D. Gaines Penn, Regina A. Jackson, W. Cravens Priest, III or Heather Coleman Brooks at (270) 781-6500.