On November 22, 2016, just 10 days before the
Department of Labor’s final rule on overtime exemptions was to become
effective, a federal judge in Texas issued a preliminary injunction halting its
The Department of Labor (“DOL”) final rule would
have doubled the salary that “white collar” employees must earn to be exempt
from overtime and minimum wage requirements from $455 per week ($23,660 per
year) to $913 per week ($47,476 per year).
The final rule would have also raised the exemption threshold for
“highly compensated employees” who are still subject to a more minimal duties
test, from $100,000 to $134,004 annually.
The emergency motion for a preliminary
injunction was filed in October by twenty-one states, and then consolidated
with another lawsuit brought by the U.S. Chamber of Commerce and other business
groups. The parties asserted that the
DOL exceeded its authority in raising the salary threshold and requiring
adjustments to the threshold every three years.
The issuance of the preliminary injunction means
the current overtime rule will remain in effect while the court determines the
validity of the new final rule.
Therefore, as it stands, the new final rule will no longer become effective
on December 1, 2016, but could still become effective in the future. Employers can therefore continue operating
under the existing rule until the courts reach a final decision.
If you have any questions
regarding the new or existing overtime rules, please contact Laura Pfeiffer at
(612) 604-6685, email@example.com
or Mark Pihart at (612) 604-6623, firstname.lastname@example.org
For additional background on the new rule,
please also refer to our previous Alert, "FLSA Overtime Exemption Salary Threshold Update
sent on May 27, 2016.