U.S. Labor Dept. appeals overtime rule injunction

Case goes to Fifth Circuit as Trump prepares to take office

The U.S. Department of Labor on Thursday filed an appeal to the preliminary injunction of its new overtime rule.

On Nov. 22, Texas federal Judge Amos Mazzant blocked the implementation of the rule nationwide.

“The Department strongly disagrees with the decision by the court,” the DOL said in a release today. “The Department’s Overtime Final Rule is the result of a comprehensive, inclusive rule-making process, and we remain confident in the legality of all aspects of the rule.”

The rule, which was set to go into effect Dec. 1, would significantly increase the minimum salary threshold at which non-exempt employees are required to receive overtime pay under the Fair Labor Standards Act, to $47,476. Businesses have been preparing for the rules by adjusting their employees’ hours and pay structures.

A group of 21 states, including Wisconsin, had sued the U.S. Department of Labor and Secretary Tom Perez to block rule, and Mazzant’s opinion found the states were likely to succeed on the merits of the case. He determined the rule issued by the DOL is “directly in conflict with Congress’ intent,” by stating that white collar employees making less than $913 per week would be eligible for overtime “irrespective of their job duties and responsibilities.”

The DOL said its salary level test and duties tests, put in place in 1940, are still used to identify executive, administrative and professional employees who are exempt from the FLSA. It argues in its appeal that its rule was meant to “better effectuate Congress’ intent to exempt bona fide white collar workers from overtime protections.”

With the appeal, which was largely expected, the District Court for the Eastern District of Texas will send the case to the Fifth Circuit Court of Appeals in New Orleans. The case will likely still be in appeals when President-elect Donald Trump takes office on Jan. 20. Trump has said he would like to exempt small businesses from the rule.

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Molly Dill, former BizTimes Milwaukee managing editor.

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