Yesterday, in a surprising and unusual decision, a federal court in Texas issued an order preventing the U.S. Department of Labor’s implementation and enforcement of the new overtime regulations it issued on May 18, 2016. Those Fair Labor Standards Act (FLSA) regulations were scheduled to go into effect on December 1, 2016, and would have made millions more American workers eligible for overtime compensation.
The case in Texas was filed by twenty-one (21) states and various business groups challenging the Department of Labor’s authority to issue the regulations, citing the extraordinary burdens they place on employers. The court issued the preliminary injunction order because it found that the Department of Labor likely exceeded its legal authority by issuing the regulations.
The court order is effective nationwide. However, the order is also temporary. Unfortunately, it is impossible, at this point, to determine if or when the court will make the order permanent, or whether the order will be vacated or reversed on appeal. For now, employers are not required to comply with the new overtime regulations.
This new development impacts most employers, adds regrettable uncertainty as to the future of the new regulations, and may ultimately render useless all of the time and effort that employers have already made to come into compliance with the regulations.
Stay tuned for additional developments on this important issue.