A federal judge in Texas issued an injunction last week enjoining implementation of the Department of Labor’s new overtime rules that were scheduled to go into effect on December 1, 2016. The rule mandates that employees falling under the executive, administrative or professional exemptions must earn at least $913 per week ($47,476 annually), which would more than double the currently existing minimum salary level of $455 a week. The rule was estimated to impact an estimated 4.2 million workers. Twenty-one states filed emergency motions for a preliminary injunction in October to halt implementation of the rule. The cases were consolidated with a lawsuit filed by the U.S. Chamber of Commerce and other business groups.
In State of Nevada v. U.S. Dep’t of Labor, No. 4:16-cv-731 (E.D. Tex. filed November 22, 2016), District Court Judge Amos L. Mazzant III ruled that the Department of Labor cannot impose the new salary requirement as a condition of exempt status of executive, administrative or professional employees because the Fair Labor Standards Act focuses on the duties of exempt employees, and not their pay.
What Does This Mean?
The injunction preserves the current status quo. Employers must continue to follow existing overtime rules. The injunction is not permanent, but maintains the current status until the court can rule on the merits of the lawsuits. Employers which were planning to reclassify salaried employees as an hourly employee do not have to implement those changes until the lawsuit is resolved.
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