On November 22, 2016, the Federal Eastern District Court of Texas granted an emergency motion for a preliminary injunction to prevent the Department of Labor (DOL) from enforcing the new Federal Labor Standards Act’s (FLSA) overtime rules set to take effect on December 1, 2016. Since the district court ruling enjoined the implementation of the overtime rules nationwide, employers do not have to comply with the proposed overtime rules that would have doubled the minimum salary requirements for the so-called “white collar” exemption to required overtime pay.
Employers should be aware, however, that the ruling was a preliminary injunction. It will only remain in effect until the merits of the case are resolved by the federal District Court, Fifth Circuit Court of Appeals, or the U.S. Supreme Court.
The FLSA’s proposed overtime rules most relevant to employers that would have taken effect on December 1, 2016 are as follows:
- The overtime threshold for exempt employees was set to increase to from $455 per week to $913 per week or from $23,660 to $47,476 annually. The proposed new salary threshold is equal to the 40th percentile of weekly earnings for full-time salaried employees in the lowest-wage census region of the United States.
- The exemption threshold for highly-compensated employees was to be raised from $100,000 to $134,004. That new amount would be subject to both the annual equivalent of the 90th percentile salary of full-time workers nationally and the duties test.
- The proposed compensation and salary levels were to be updated every three years to maintain the percentile levels described above and to ensure that the regulations adequately distinguish between white collar workers eligible for overtime and those eligible for an exemption.
We will follow this issue closely as it proceeds through the courts and plan to update our readers accordingly. In the meantime, if you have any questions regarding your organization’s compliance with FLSA, please contact an attorney at Bea & VandenBerk.
This article is provided for general information and is not intended to serve as legal advice for a specific situation. The attorneys of Bea & VandenBerk are experienced in representing organizations in employment matters. If you are in need of specific advice or legal representation, please do not hesitate to contact us.
©2016 Bea & VandenBerk