What Just Happened:
On November 22, 2016, a federal judge barred the Department of Labor ("DOL") from implementing changes to overtime rules ("Final Rule") under the Fair Labor Standards Act ("FLSA"), which were scheduled to take effect on December 1. The enjoined Final Rule almost doubles the annual salary threshold for what is called the "white collar" overtime exemption (increasing it to $47,476). The judge stated the DOL wasn't authorized to create a salary test. Congress did not intend to categorically make large segments of the workforce eligible or ineligible for overtime based solely on their income, according to the Texas federal judge. The injunction blocks the Final Rule nationwide. For background information on what the Final Rule would mean for businesses, click here.
Next Steps for Employers:
The judge froze the Final Rule before enforcement could begin. Many believe that President-elect Donald Trump will likely consider revising the regulation through rulemaking or legislation, if an appellate court winds up restoring it. The DOL has indicated it will appeal the federal judge's injunction.
At this point, employers have a reprieve from the Final Rule and may choose to wait and see what happens next in the court case. Many employers, however, have already taken steps to comply and it might be unpopular to reverse those changes.
Please feel free to contact your Howard & Howard labor and employment attorney to discuss options and to learn more about how this decision could impact your business.