A Texas federal judge on Tuesday granted a preliminary injunction against the FLSA overtime rule originally scheduled to take effect December 1, 2016. The rule is an effort by the Department of Labor to expand overtime protections by more than doubling the minimum salary threshold for exempt employees. In granting the nationwide injunction, the Judge concluded that the 21 plaintiff states have shown that the Department of Labor exceeded its statutory authority by increasing the threshold salary level to an extent that the duties test had been supplanted, and by establishing the automatic updating mechanism for setting the threshold salary level for overtime pay in the future.
What we know – the salary increases that were set to be implemented December 1, 2016 are no longer legally required.
What is unclear – this is a preliminary injunction (not a final order), and normally the DOL would fight this decision. It is not, however, likely that the issue will be resolved by January 20, 2017 (Inauguration day) and the incoming administration has not communicated whether it intends to defend the proposed regulations.
We will continue to monitor this situation and will provide additional Alerts if our analysis changes.
The contents of this Alert are for informational purposes only, and do not constitute legal advice. If you have any questions about this Alert, please contact a member of the Shulman Rogers Employment and Labor Law Group or the Shulman Rogers attorney with whom you regularly work.
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