New Overtime Law to Raise Threshold Blocked by TX Federal Judge

Earlier in the year, the Obama Administration backed and passed a ruling from the Department of Labor (DOL) that would have doubled the minimum threshold for mandatory overtime pay for salaried workers. As the ruling stated, starting December 1st, 2016, the new threshold would be $47,476 per year, up from $23,660. That has not come into effect, however, and likely will not, due to a federal judge of the Eastern District of Texas blocking the ruling.

Judge Mazzant III used an injunction only days before the ruling would be active to stop it. He was apparently backed by 21 states and a multitude of interested business groups. Citing the usual limitations of the DOL’s powers and authority, the judge has said that the ruling was excessive of the department’s abilities and would have changed the defining traits of a salaried worker from their duties to how much they make each year. If determined to be true, that would represent a violation of the Fair Labor Standards Act (FLSA).

Challengers of the ruling were also concerned that it had not considered the financial ramifications the overtime hike would have caused to smaller businesses and operations that employ salaries workers. The ruling included a clause that stated the salary limit would be raised based on inflation every three years. They also cited that different regions throughout the country could afford or not afford the salary increase based solely on geo-economic differences, and that the ruling did not account for those.

What Happens to the Ruling Now?

As it stands, the ruling is in considerable limbo. A higher court can review the motion in a summary judgement and either choose to uphold or dismiss it. Briefs and arguments could be scheduled to look into both the ruling and the motion in extensive detail. Or legislators could attempt to pick and choose portions of the ruling to keep and discard, or try to bring it down to state-level rules, allowing states in favor of it to adopt it and those not in favor to avoid it.

With the administration change occurring next month, a likely option is that the judge’s blockage will be upheld and the ruling will be discarded. Most of the opposition for the ruling came from Republican representatives, who will hold a majority in Congress and be backed by a GOP White House.

For more information about overtime laws or for help with an employment lawsuit involving wages, contact Shellist Lazarz Slobin. Our Houston employment law attorneys are capable of representing and protecting your best interests, whether you are an employer or employee in Texas. Complete a submission form today to get started.

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