Federal Court Blocks Implementation of DOL's New Overtime Rule Nationwide 
Late Tuesday afternoon, U.S. District Judge Amos L. Mazzant granted an emergency Preliminary Injunction blocking implementation of the U.S. Department of Labor's (DOL) Final Rule on Overtime Regulations, which was scheduled to go into effect on December 1st.  The Court's injunctive relief is in effect pending a full determination of the matter on the merits.
In reaching this conclusion, Judge Mazzant found that, in enacting the Final Rule, "the Department exceed[ed] its delegated authority and ignore[d] Congress's intent by raising the minimum salary level such that it supplants the duties test" and that "the Final Rule does not comport with Congress's intent."

The DOL's Final Rule requires employers to dramatically increase the salary thresholds under the FLSA's white collar exemptions in order to retain the exempt status of employees. More specifically, under the Final Rule, employers must increase the minimum salary threshold for employees qualifying under the white collar exemptions from $455 per week ($23,660 annually) to $913 per week ($47,476 annually) in order to maintain exempt status.  The Final Rule also would increase the new minimum salary threshold for the Highly Compensated Exemption from $100,000 annually to $134,000.  The Final Rule also establishes an automatic updating mechanism that adjusts the minimum salary level every three years; the first automatic increase is scheduled for January 1, 2020.  These new rules have received substantial criticism from the business community.

The injunction entered by Judge Mazzant yesterday applies nationwide.  A s such, pending further action, the December 1, 2016 implementation date of the Final Rule is postponed and employers need not adjust salaries upward in order to continue to claim exempt status.
Although employers are not required to increase employees' salaries to the new threshold on or before December 1st [or "convert" to non-exempt those employees who fall below that threshold], we do advise our clients to complete their planning so that they are ready to implement any necessary changes depending on the results of the Court's final disposition of the matter.
NFC will continue to keep you updated on the status of the Final Rule.  In the meantime, please reach out to the NFC attorney with whom you normally work to discuss how this ruling impacts your business.
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