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Blocked! U.S. Federal Judge Issues a Preliminary Injunction on the New Wage and Hour Regulations

By Sean Darke, Shareholder, Wessels Sherman

U.S. Federal District Judge Amos Mazzant granted a preliminary injunction blocking the U.S. Department of Labor’s new salary threshold rule for overtime regulations.  The Judge ruled that the States and businesses who filed the lawsuit showed a likelihood for success in challenging the implementation of the new final rules.   Instead of starting December 1, 2016, the court issued a preliminary injunction, so the Court can look further into the issue relating to the DOL’s authority.  This is a big win for employers across the nation, but it could be only temporary.  Because the Court will make an actual determination to the DOL’s actual “authority to make the final rule as well as the final rule’s validity,” Judge Mazzant stated.

 

The overall argument by the States is that the DOL was not provided the authority by Congress drastically increase the salary threshold amount, as the new regulations tried to do. Judge Mazzant further ruled “Congress defined the exemption with regard to duties, which does not include a minimum salary level.” The Judge continued that the DOL simply did not have the authority to essentially create a salary increase that overtakes the job duties portion of the test.  In addition, the Judge ruled that the automatic increases were also beyond the DOL’s authority.

 

So what does these mean for businesses? First of all, the December 1, 2016 is no longer the deadline to be in compliance with the new overtime rules under the “white collar” exemptions. Secondly, businesses must be careful to remember that this is only a preliminary order and the Court will review all of the issues again later and make a final ruling on whether or not the DOL has the authority to increase the salary threshold as it did with the new rules. In addition, with the new administration starting in late January, will all of this confusion become moot?

 

Sean Darke is a shareholder at Wessels Sherman, a management-side labor and employment attorney in Chicago, Illinois. Mr. Darke has successfully defended Businesses in all areas of Wage and Hour laws under both State and Federal laws.  Sean Darke is rated as an Illinois Super Lawyers Rising Star, a high distinction of peer recognition and professional achievement of outstanding lawyers in more than 70 practice areas given to no more than 2.5 percent of Illinois attorneys. Mr. Darke can be contacted at sedarke@wesselssherman.com or 312-629-9300.

 

 

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