by Laura Pokrzywa
Just when you thought nothing could be more unexpected than the Chicago Cub’s winning the World Series, U.S. District Judge Amos Mazzant entered a preliminary injunction to block the Department of Labor from implementing the new minimum salary requirements which would have extended overtime pay to millions more American workers. Yesterday, the US District Court in Sherman, Texas entered the ruling which temporarily blocks the controversial new rule that was set to take effect in a few short days, on December 1.
The Court document stated, “The Court has authority to enjoin the Final Rule on a nationwide basis and decides that it is appropriate in this case, and therefore GRANTS the State Plaintiffs’ Emergency Motion for Preliminary Injunction … Therefore, the Department’s Final Rule … is hereby enjoined … pending further order of this Court.” A preliminary injunction is issued early in a lawsuit to stop the defendant from continuing an action that the court determines could be harmful and cause irreparable damage. Among other issues, the Court determined that the Final Rule exceeded the Department’s authority, particularly concerning the automatic increases to the minimum salary level set to occur every three years.
For more information about the DOL’s New Rule and the action taken against it, see our previous blog articles:
- The New Requirements for Overtime Exemptions are Out (posted May 18, 2016)
- How Employers Should Prepare for the New Overtime Rules (posted May 25, 2016)
- 21 States (among others) File Suit against DOL for New Overtime Rules (posted Sept. 28, 2016)
With a conservative, more business-friendly, administration waiting in the wings, many legal watchdogs anticipate a bleak future for the DOL’s currently unenforceable new rule. For now, employers can take a deep breath, enjoy a slice of pumpkin pie, and wait for the next step.
No matter what comes of the new rule, the penalties for violating the existing law can be stifling. The DOL may recover back wages for employees that have been underpaid in violation of the law. Violations may also result in civil or criminal action and employers may be assessed civil money penalties of close to $1,900 for each willful or repeated violation of the minimum wage or overtime pay provisions of the law. That can — and has — totaled hundreds of thousands of dollars for some employers.
Employers should remain diligent to ensure all employees are properly classified as exempt or non-exempt, according to the requirements of the Fair Labor Standards Act (FLSA). In addition, all employers must establish a clear procedure for non-exempt employees to accurately record all hours worked, whether or not they are paid by salary.
If you have questions about the FLSA or would like help creating policies related to overtime, timekeeping, deductions from pay, or other wage and hour issues, please email us at hrhelpline@eastcoastrm.com. We will be happy to help.
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