New FLSA Salary Test Halted

A federal court in Texas has temporarily blocked the implementation of the new FLSA regulations set to take effect on December 1, 2016. On hearing an Emergency Motion for Preliminary Injunction filed by 21 State Plaintiffs, the Court reasoned that a temporary injunction was appropriate. In a decision filed November 22, the Court said that the States could show that when Congress enacted the FLSA, based on the plain language in the statute, it intended for the executive, administrative, and professional exemptions to depend on the employee’s duties and not the employee’s salary, and that in the new FLSA regulations, the DOL “exceeded its delegated authority and ignored Congress’s intent by raising the minimum salary level such that i t supplants the duties test.” The Court observed that DOL itself said that employees who currently fall below the salary threshold would automatically become eligible for overtime without a change to their duties, but Congress did not intend the amount of salary to categorically exclude employees from exempt status. Because the Court found the new regulations unlawful, it also found that the DOL lacked the authority to implement the automatic updates to the salary level.

In granting the preliminary injunction, the Court stated that it would preserve the status quo while it determines the merits of the case. It is likely that the decision will be appealed. However, the future of the regulations is uncertain as the matter is not likely to be resolved before the new Trump Administration takes over, and the new Administration could revise the regulations. For now, employers do not have to comply with the new regulations which would require overtime for employees paid under the new minimum salary threshold, which was $47,476.

This article is authored by attorney Laura Bailey Gallagher and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice.  Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

Tags: , ,

Comments are closed.