Media Type: Alert
On Tuesday, November 22, 2016, a federal judge in Texas issued a temporary injunction that halts implementation of new Fair Labor Standards Act (FLSA) overtime rules, which would have expanded overtime pay to millions of workers.
The contested rules, slated to go into effect December 1, 2016, would have more than doubled the minimum salary test for the three exemptions from overtime – administrative, executive and professional – from the current rate of $455 per week ($23,660 annually) to $913 per week ($47,476 annually). The minimum salary for the highly compensated employee exemption would have increased from $100,000 to $134,004.
The new rules were challenged by 21 states and various business groups. The injunction maintains the status quo, allowing the judge more time to come to a final decision on the overtime rules. The future of the regulation is still unclear as the legal challenge, if appealed, could take years to conclude and, in any event, President-elect Trump’s administration could make the issue moot.
Employers may continue to follow the existing FLSA overtime regulations until a final decision is made. However, it may be in their best interest to have a plan on how to comply with the new regulations if they do go into effect. If an employer has already adjusted exempt employees’ salaries to meet the new threshold, they may wish to leave that decision in place.
If you have questions about the injunction on the new FLSA overtime rules, or any other employment law issue, please contact a member of our employment law department at 301-340-2020.
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