Federal Court Blocks Overtime Rule

November 30, 2016

Last week, a U.S. District Court Judge in Texas issued a nationwide preliminary injunction Document is available for download (.pdf) to postpone implementation of the new Fair Labor Standards Act overtime rule, which was scheduled to go into effect on December 1. This ruling, which was issued in response to a lawsuit filed by 21 U.S. States and several business groups, put an immediate halt to the new rule, which would have raised the salary threshold for employees to be considered exempt for overtime compensation from $23,660 to $47,476. While it is expected that the Obama Administration will appeal this decision, should the timing of such an appeal extend beyond January 20, the newly inaugurated Trump Administration may take steps to re-open the rulemaking proceeding and revise the final rule.

The response in the higher education community to this recent court action has varied. While some institutions have already begun implementing the rule and will continue to do so, others have decided to put all plans for compliance on hold. (See Blocked Overtime Rule Sows Uncertainty for Colleges.) All TRIO staff are advised to consult with the Human Resources personnel at their host institutions/agencies to determine which course of action their institution will pursue.