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FLSA Ruling Delays Overtime Expansion

The information in this blog post refers to the proposed and final rules published by the U.S. Department of Labor in 2015-2016. To see the most recent information, click here.

The Ruling

Tuesday, Nov. 22, 2016, the U.S. District Court for the Eastern District of Texas issued a ruling on a lawsuit filed by 21 states that blocks the implementation of the Fair Labor Standard Act’s (FLSA) new overtime expansion rule.

The rule, which would have extended overtime protections to 4.2 million workers nationwide, has been paused indefinitely until Judge Amos L. Mazzant III makes a final ruling. It’s important to note that it’s also possible that the new administration or Congress could eventually change the rule.

The injunction comes just in time for employers who were expected to comply by Dec. 1. The Court does not have to make a decision within a set timeline; so employers will have to wait and see what happens to the rule in the future.

Ultimately, the Court’s decision is the result of the belief that the new overtime expansion rule was outside the scope of what Congress intended for the standard executive, administrative and professional – or “white collar” – exemptions.

Also, the Court concluded that Congress did not grant the Department of Labor the authority to give the salary-level test more weight than the duties-based test under the final rule.

What’s Next

While no time-frame was given on how far into the future the injunction will remain in effect, employers should remain aware that the rule could become effective at a later date depending on the Court’s ultimate decision.

We will provide more information as it becomes available. In order to stay tuned as more details are sure to emerge.

DISCLAIMER: The information provided in this blog is for general informational purposes only. Accordingly, Paycom and the writer of the above content do not warrant the completeness or accuracy of the above information. It does not constitute the provision of legal advice, tax advice, accounting services, or professional consulting. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal or other professional services.