Texas Issues An Injunction Putting Overtime Rule On Hold

The United States Department of Labor had issued a rule that would have made over 4 million more employees eligible for overtime pay effective December 1, 2016. The rule would have made overtime pay available for full-time, salaried employees earning up to $47,476 a year – a significant increase in salary from the prior rule. However, states, business groups and employers challenged this rule arguing that the higher income threshold would decrease their profits, disrupt their business models, and/or decrease opportunities for their employees.

As reported by the Washington Post on December 1, 2016, a federal district court judge in Texas issued an injunction effectively putting a hold on the implementation of the rule. According to the court, the Department of Labor exceeded its executive authority when it increased the salary limit. Although the Department of Labor has filed an appeal it is uncertain whether the Trump Administration will pursue it.

Regardless of the fate of the rule, employers can choose to follow the rule. For example, the Washington Post reported that Walmart, Marshalls and TJ Maxx intended to implement a higher salary threshold thus making more of their employees eligible to receive overtime pay.