We reported yesterday that the new rule increasing the minimum wage levels for salaried employees who are exempt from overtime pay would be effective on December 1, 2016. Yesterday, a federal judge in the Eastern District of Texas granted a temporary injunction against the rule. Twenty one states had challenged the rule, arguing that Congress never intended to set any salary threshold for overtime purposes.
The Labor Department can appeal to the 5th US Circuit Court of Appeals, but this court has blocked other Obama executive actions in the recent past. While this injunction is temporary, it does send a signal that there is a good likelihood the judge may ultimately rule against the Department of Labor in this case.
This ruling is being reported as a severe blow to this regulation. It is very likely that this ruling will push further consideration of the rule back until well after Trump is sworn into office. At that point, the rule’s fate may be sealed anyway. We will keep you all posted as this rule progresses, but as for now, the December 1 deadline is no longer in effect.