Employers have been working to comply with new overtime rules issued by the United States Department of Labor that raise the salary level in order to meet certain exemptions from overtime rules before a December 1, 2016 deadline. Those rules require that in addition to meeting certain requirements with regard to an employee’s duties, the employee must also earn a minimum salary of $47,476. The old rule required that the employee earn a minimum salary of $23,660. The dramatic increase in the salary requirement caused employers to reevaluate classifications and to generate new policies regarding overtime and work hours.
On November 22, 2016, the United States District Court for the Eastern District of Texas issued a preliminary injunction, temporarily barring the Department of Labor from enforcing the new overtime rule. The order will remain in place pending a full hearing on the issue. While the order is temporary, as a prerequisite to entering the order, the Court was required to find that there was a substantial likelihood of success on the merits of the argument that the DOL exceeded its authority in promulgating the rule. So, there is some indication that the Court may bar enforcement of the new rules permanently.
For now, employers are temporarily relieved of the obligation to comply with the new rules by the December 1, 2016 deadline. Because the outcome is not guaranteed, employers should have their new policies ready to go, but do not need to implement them on December 1. It is simply too early to say whether employers should “shelve” those new policies. We will have to wait for the Court’s final ruling. Stay tuned to this space as the case unfolds.
Patricia Collins is an employment and litigation Partner at Antheil Maslow & MacMinn, LLP and chair of the labor and employment practice group.