Hopefully you had already heard by now that the Department of Labor issued a new overtime rule that would require employers to pay time and a half to employees that worked more than forty hours a week and earned less than $47,476 a year. This raised the minimum earning level by about two times – from the current standard of $23,660 – and would have affected about 4.2 million American workers. The rule also established an automatic updating mechanism that would adjust the minimum salary level every three years. It was supposed to take effect on December 1, 2016; however, this rule has been blocked from going into effect by a federal judge in Texas.
U.S. District Judge Amos Mazzant issued a preliminary injunction on November 22 in a case filed by several states (twenty-one to be exact) challenging the rule against the Wage and Hour Division of the Department of Labor. The state plaintiffs argued that that new rule would cause an increase in government costs in their states and would cause businesses to have to pay substantially larger salaries.
In issuing the preliminary injunction, Judge Mazzant found that the plaintiffs have shown a likelihood of success on the merits because the rule exceeds the Department’s authority under Chevron. He further found that the plaintiffs will suffer irreparable harm if the preliminary injunction is not granted as agencies operating within budget constraints will have to comply with the rule to the detrimental effect on government services that benefit the public.
Furthermore, the judge found that the balance of hardships favors the plaintiff because: “(1) the States will be required to spend substantial sums of unrecoverable public funds if the Final Rule goes into effect; and (2) the Final Rule causes interference with government services, administrative disruption, employee terminations or reclassifications, and harm to the general public.”
In issuing the injunction, Judge Mazzant found a nationwide injunction to be proper as the new overtime rule is applicable to all states, not just the states participating in the suit. Furthermore, it is unclear the duration of this nationwide preliminary injunction. Specifically, Judge Mazzant enjoined the Department from implementing and enforcing the new overtime regulations “pending further order of this Court.”
In a prepared statement, the Department of Labor stated that it “strongly disagrees 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 statement goes on to read, “The Department’s Overtime Final Rule is the result of a comprehensive, inclusive rule-making process, and we remain confident in the legality of all aspects of the rule. We are currently considering all of our legal options.”
About the Author:
Heather Mims is an associate attorney at Centre Law & Consulting. Her practice is primarily focused on government contracts law, employment law, and litigation. Heather graduated magna cum laude from the George Mason School of Law where she was the Senior Research Editor for the Law Review and a Writing Fellow.