The Final Rule for Overtime Suspended by Federal Judge

On November 22, 2016, Federal Judge Amos L. Mazzant III of the Eastern District of Texas issued a nationwide preliminary injunction on the final rules for overtime for exempt white-collar workers.  The injunction suspends the implementation of the regulation just days before it was set to take effect on December 1, 2016.  

The final rule increases the salary threshold for full-time workers from $23,660 to $47,476, which the Department of Labor (DOL) estimates will impact 4.2 million salaried workers.   The final rule also establishes an automatic updating mechanism that adjusts the salary threshold every three years.   In October, a group of 21 states and over 50 business organizations filed suit against the DOL challenging the final rule and requesting emergency preliminary injunctive relief.  The states argued that the rule was a burden on business and that it will increase costs and decrease working hours.

While at this point, the injunction is only preliminary in nature and may be subject to appeal, employers are not required to meet the changes that were to be effective December 1, 2016. 

Contact us with questions or concerns regarding the Final Rule and the impact it may have on your organziation and visit our Tax Services page to learn about the services we offer the industry.