A Texas United States District Court Judge issued a nationwide preliminary injunction yesterday afternoon (Tuesday, November 22), preventing the U.S. Department of Labor from implementing the new overtime rules set to take effect next week, on Thursday, December 1, 2016, requiring a minimum annual salary of $47,476 for employees to qualify for white collar exemptions to the Fair Labor Standards Act’s (FLSA) overtime and minimum wage requirements.
The Court found that the Department of Labor exceeded its authority in issuing the new exemption rules, because the rules raise the minimum salary thresholds regardless of the duties test and employ automatic increases every three years without the required administrative rule-making process.
The preliminary injunction is temporary, but the Court’s reasoning suggests that it will issue a permanent injunction upon further consideration of the case. The Department of Labor may appeal the Court’s decision, but unless the appeal receives expedited consideration, by the time the appeal makes its way through the courts, it is likely that the new presidential administration will be in place and calling the shots.
Meanwhile, for the duration of the preliminary injunction, employers may hold on implementing salary increases and re-classifications that were planned to comply with the new rules, or may choose to move ahead as planned.
IMPORTANT: The duties tests remain the same, so to the extent employers have identified a need to re-classify employees to comply with the duties tests, a failure to re-classify may be viewed by the Department of Labor as a willful violation.