On November 22, 2016, the United States District Court for the Eastern District of Texas issued an order enjoining the United States Department of Labor ("DOL") from implementing or enforcing the new Fair Labor Standards Act ("FLSA") regulations increasing the minimum salary required to qualify for the so-called "white collar" exemptions.
This past May the DOL adopted new final rules regarding the "white collar" exemptions from the FLSA's overtime requirement. The new rules, which were set to go into effect on December 1, 2016, increased the minimum salary required to qualify for the "white collar" exemptions from $455/week ($23,660/year) to $913/week ($47,476/year). As a result of the injunction issued by the Texas federal court, the new DOL rules will not go into effect on December 1st, and it is unclear whether they will go into effect at all. Accordingly, until further notice, the minimum salary required to qualify for a "white collar" exemption from overtime will remain $455/week ($23,660/year).
Meanwhile, each employer needs to decide what steps to take. Many employers have worked hard to prepare for the December 1st implementation of the new salary minimum rules. If you have already made changes, we suggest you take time to consider your options. Immediately repealing pay increases or rushing to reclassify employees may have other consequences, such as a detrimental effect on employee morale. Additionally, it is possible the rules will be reinstated in the future. However, if you have not yet made changes, it may make sense to wait and see what unfolds.
For more information please contact the Drummond Woodsum Labor and Employment Group.