December 2016: On December 1, 2016, the DOL appealed the nationwide injunction. The Fifth Circuit Court of Appeals issued an order on December 8, 2016, expediting the review of the nationwide injunction that prohibited the implementation of the DOL’s new regulations on overtime. It appears that briefing will be completed in January 2017 and the matter will be set for arguments promptly thereafter.
November 22, 2016: A Texas District Judge granted an injunction that prohibited the implementation of the DOL’s new regulations expanding overtime saying it improperly created a de-facto salary test under the Fair Labor Standards Act.
October 28, 2016: Twenty-one states, as well as numerous business groups, have sued the United States Department of Labor (“DOL”) in order to challenge new regulations that will broaden that the number of workers potentially eligible for overtime pay under the federal Fair Labor Standards Act (“FLSA”). The new regulations, effective beginning December 1, 2016, provide that full-time workers making a yearly salary of less than $47,476 cannot satisfy the “salary” portion of the test that governs whether an employee may be treated as “exempt” from overtime requirements. This means that an employee whose duties qualify as administrative or executive and who would otherwise qualify as exempt may nevertheless be entitled to overtime pay if they make more than $47,476 in a year. The lawsuits allege that the change exceeds the rule-making authority granted to the DOL. The states that have brought suit additionally argue that the DOL has violated the Tenth Amendment by interfering with the manner in which state government employees are paid. The plaintiffs have asked the Court for an injunction, which would prevent the new rule from going into effect until after the lawsuits are resolved. More information about the rule at issue in the lawsuits may be found at: https://www.dol.gov/featured/overtime
Background: August 2016: An important change in the federal wage-and-hour rules becomes effective on December 1, 2016. The new rule recently promulgated by the Department of Labor will increase the salary level from $455 per week ($23,660 annually) to $913 per week (or $47,476 annually). Additional changes were made to the salary rules applicable to the “highly compensated employee” exemption, and the rule provides for automatic updates to the salary and compensation levels every three years. No changes have been made to the “duties test.” Read more
