Ross Kornowske
November 23, 2016

Business Law

New Overtime Pay Law Blocked

Overtime Pay Law

As many of you are likely aware, President Obama’s executive order raising the salary threshold for employee overtime pay eligibility to $47,476.00 was set to take effect December 1, 2016.

With this an estimated 4 million employees throughout the US would have been eligable for overtime pay right before the holiday season.

Businesses can now breathe a sigh of relief as the overtime pay law has officially been blocked. As of November 22, 2016, United States District Judge, and Obama appointee, Amos Mazzant of Texas granted a motion brought by 21 states for a nationwide injunction, effectively blocking the new law from taking effect.

Judge Mazzant’s basis for granting the injunction is that the new law would “create essentially a de facto salary-only test,” according to his 20-page ruling.[1]

 

So What Does this Mean?

As for now, it is unclear as to what the ultimate fate of the new overtime pay law will be. Judge Mazzant’s decision on November 22nd will all but certainly be appealed to the higher courts.

Despite the imminent appeal of Tuesday’s decision, an appellate decision will not likely be made until after the proposed effective date.

Further, it is unlikely that an appellate decision which revitalizes President Obama’s overtime pay rule would be retroactive to December 1, 2016. That being said, it is still important for companies to analyze employee salaries and job descriptions while the legal process plays out in the event Tuesday’s decision gets overturned on appeal.

Our office will continue to update you on this matter as more information becomes available. If you have any questions regarding the new overtime pay law please visit our past blog post: New Overtime Pay Rules or if you have any questions regarding the November 22nd decision, please contact our office at 920-499-5700 and speak with one of our Green Bay business attorneys.

[1] http://www.reuters.com/article/us-usa-employment-overtime-idUSKBN13H2JY

 

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