On November 22, 2016, the U.S. District Court in the Eastern District of Texas issued a Memorandum Opinion and Order in the case challenging the Department of Labor revisions to the “white collar” exemptions to the overtime provisions of the Fair Labor Standards Act. Those revisions would have significantly changed the “minimum salary test” for determining whether an employee should automatically be categorized as a non-exempt employee, by raising the minimum salary threshold from $455 per week ($23,600 annually) to $921 per week ($47,892 annually). The revisions would have also established an automatic updating mechanism to adjust the threshold every three years. In the Opinion and Order, the Court granted the plaintiffs’ motion for a temporary, nationwide injunction. The injunction postpones implementation and enforcement of the revisions which were to go into effect on December 1, 2016.
We have spent much time learning about and preparing for the new guidelines to go into effect. We have learned that the overtime regulations that were in place all along, before any proposed changes to guidelines, may not have been followed in some cases. The planning you have done is good in that you are now in better compliance in determining the application of the exempt and non-exempt rules and time tracking of those employees who are non-exempt. The job duties tests were not changing in the proposed regulations and are still applicable, so your work was NOT in vain. This injunction simply leaves the current laws in place with the salary level for an exempt employee at $23,660 instead of the increased amount.
We will watch the appeals and forward rule changes if/when they come. For now, there are no changes to the salary level. The General Council on Finance and Administration has issued a memorandum on this injunction providing more information on the implications. Please let us know if you have questions on this update.