On November 22, 2016, the U.S. District Court for the Eastern District of Texas issued a nationwide injunction to delay implementation of the new Department of Labor Final Rule, which would have increased the minimum salary requirements for certain exempt workers under the Fair Labor Standards Act. The DOL’s Final Rule increases the minimum salary threshold from the current rate of at least $455 per week ($23,660 annually) to at least $913 per week ($47,476 annually) (adjusted every three years thereafter), for certain executive, administrative and professional employees to be exempt from overtime pay. The Final Rule was originally set to go into effect on December 1, 2016, but is now temporarily postponed due to the Court’s ruling.
However, the District Court could cancel the injunction at any time, or the DOL could appeal the decision to the 5th Circuit Court of Appeals, which could reverse the District Court and lift the injunction at any time (whether before or after the December 1 deadline).
At least for the time being, employers can continue to use the minimum salary requirements currently in place, and need not increase salaries or convert employees to hourly pay to comply with the previously scheduled overtime rule change. Please keep in mind that regardless of the injunction and any subsequent ruling, employers are free, though not required, to move forward with previously planned salary or other changes.
It seems most likely that the injunction will be lifted one way or another, and the Final Rule will go into effect at some point in the near future, at least until the Trump administration addresses the issue.
Please contact David Lawrence for assistance navigating the FLSA overtime requirements or for any other questions regarding employment law.