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FLSA Rule Change Indefinitely Postponed

Late Tuesday, November 22, a federal judge in Texas issued a nationwide preliminary injunction against the United States Department of Labor’s (DOL) implementation of the final FLSA rule regarding white collar exemptions to overtime compensation, which was scheduled to take effect on December 1, 2016. The full opinion is available at https://www.scribd.com/document/331996694/Nevada-v-Labor-Preliminary-Injunction. (For a copy of the PDF, please click here.)

Judge Mazzant ruled that it appeared likely the plaintiffs would prevail in showing that the DOL had exceeded its authority to interpret the FLSA, both as to the establishment of a new minimum salary threshold and the automatic three-year adjustment to that threshold.  This ruling is remarkable in many respects and will likely be reviewed by the 5th Circuit Court of Appeals and, ultimately, the United States Supreme Court.

The immediate effect of the injunction is an indefinite postponement of the implementation of the DOL rule.  After this preliminary injunction, the litigation will continue and the court must determine whether to enter a permanent injunction.  This leaves the ultimate fate of the DOL regulation uncertain, but this preliminary injunction at least suggests the possibility of a future permanent injunction.

As of this moment, employers nationwide have no obligation to comply with the DOL’s amended rule regarding executive, administrative, and professional overtime exemptions. The previous rule and its threshold salary amount of $455 per week (the equivalent of $23,660 annually) remain in effect.

If you have questions regarding your FLSA compliance strategy, please contact Brett Adair at Carr Allison: badair@carrallison.com or 205.949.2930.

 

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