By Jodi Schafer, SPHR, Owner, General Partner, Human Resource Management Services
Last week news broke about a temporary injunction issued by a Texas court to suspend the upcoming changes to the FLSA overtime rules, which were scheduled to take effect on December 1st. This places many of you in a difficult position regarding changes you had planned to make to your employees' exemption statuses and pay rates to be compliant with the impending FLSA rules. Please read below for more information courtesy of Brandon Zuk and Aaron Davis, employment law attorneys with Fraser Trebilcock:
Nine days before the December 1, 2016, effective date, a federal district court in Texas has issued a nationwide injunction against implementation of the United States Department of Labor's new rules which would dramatically increase the salary thresholds for most workers exempt from the overtime pay requirement of the Federal Fair Labor Standards Act. The injunction is a preliminary injunction, meaning that it is not a permanent injunction. The court did state that the Plaintiffs, numerous state attorneys general, are likely to succeed in a final decision, and, therefore, a preliminary injunction preserving the status quo is warranted.
At this time, there is no news on whether the Department of Labor intends to pursue an emergency appeal of the preliminary injunction. It is also unknown whether the new administration's Labor Department and Justice Department will continue to defend the new regulation after the presidential inauguration.
The preliminary injunction does not forbid employers from adopting the new, higher salary thresholds voluntarily; employers have always been permitted to treat exempt employees as nonexempt for overtime purposes. But for the time being at least, compliance with the new overtime pay thresholds will not be mandatory.