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Federal Judge Blocks Obama Administration's Overtime Pay Rule

November 28, 2016

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​A federal district judge in Texas last week at least temporarily blocked the Department of Labor’s (DOL) overtime rule set to go into effect Dec. 1, a decision that could have a substantial impact on colleges and universities.

In a last-minute development on an issue for which many campuses have been preparing for months, U.S. District Judge Amos L. Mazzant III granted a temporary injunction in response to a legal challenge filed by 21 states and the U.S. Chamber of Commerce after the final version of the regulation was released in May.

Currently, professional and managerial employees making more than $23,660 a year are generally exempt from federal Fair Labor Standards Act (FLSA) overtime regulation. Under the new rule, employees would have had to be paid more than $47,476 to be exempt. Those making below that amount would have had to be classified as hourly workers eligible for overtime pay, which would have impacted a wide array of non-faculty employees—from athletics coaches and trainers to admissions recruiters and student affairs officers—whose work is not well suited to hourly wage status.

DOL released its proposed rule in July 2015, after being charged by President Obama in 2014 to revise the regulation governing exemptions to FLSA overtime pay requirements. Along with a number of higher education associations, ACE submitted comments on the proposed rule that identified a range of problems.

The Obama administration likely will appeal the injunction. At the moment, the timing of further developments in the case either at the district court or a federal appeals court is unclear.

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