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Federal Judge Halts Overtime Rule

Judge Amos L. Mazzant III
Judge Amos L. Mazzant III

The future is uncertain for the U.S. Department of Labor's overtime rule after a Texas federal judge blocked it.

The rule, which would have gone into effect December 1, would have doubled the salary threshold for white-collar employees to more than $47,000 a year.

Judge Amos L. Mazzant III of the Eastern Texas District, said in his ruling that it was "improper" for the Department of Labor to adopt a salary test that excludes a substantial number of workers who already meet the exemption requirements.

Fisher Phillips partner Christine Howard said even though the rule was struck down, it doesn’t mean the fight to get it passed is over.

“There'll be a period for the DOL, depending upon again how the Trump administration handles this, to go through another lengthy comment period to revise its rules,” she said.

In September, two lawsuits were filed in the Eastern District of Texas, challenging the department’s authority to increase the salary threshold. One of the lawsuits was filed by 21 states and the other was filed by business groups, including the U.S. Chamber of Commerce.

The Fisher Phillips law firm, located in Tampa, put out a statement on what employers should do now if they had already made changes to their compensation plans.

“It might be unpopular to reverse course now,” the statement reads. “Although you may have the legal right to revert to the status quo depending on your circumstances, you might consider waiting until a final decision is reached in court, Congress, and the White House before doing anything further.”

Howard said Judge Mazzant’s decision has a huge impact on the future.

“That will certainly stall the DOL's efforts to enforce the rule. If there's a permanent injunction, you know, certainly that will be even a greater obstacle to see the rule's survival,” she said.

The labor department also released a statement on the last-minute decision:

“We strongly disagree with the decision by the court, which has the effect of delaying a fair day’s pay for a long day’s work for millions of hardworking Americans.”

The new rule affects around four million workers.

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