(thanks to member Richard Forsten at Saul Ewing for providing this)
New FLSA Overtime Rule Blocked
November 22, 2012
The new Fair Labor Standards Act (“FLSA”) overtime rule, which set to raise the white collar exemption minimum salary requirement from $23,660 per year to $47,476 per year effective December 1, 2016, was blocked this afternoon by a Texas federal judge.
The judge indicated that the plaintiffs, comprised of 21 states, met the burden required for a preliminary injunction finding that the Department of Labor (“DOL”) exceeded its delegated authority. The court held that the DOL does not have the authority to utilize a salary-level test or an automatic updating mechanism. The DOL is now enjoined from implementing and enforcing the rule pending further order of the court. The injunction is expressly nationwide in scope, including applying to states that did not join in the lawsuit. Accordingly, 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.
However, the situation remains fluid and employers should stay tuned – Saul Ewing is continuing to monitor the developments regarding this important subject that impacts millions of employees and will continue reporting as more information becomes available. To the extent that an employer has employees who are incorrectly being treated as exempt based on duties and authority rather than salary level, the injunction does not apply to those situations and those situations still represent potential violations and liability and changes should be made.
The case is State of Nevada, et al v. United States Department of Labor, et al, case number 4:16-cv-00731, United States District Court for the Eastern District of Texas