Monthly Archives: November 2016

Federal Judge Blocks New Overtime Rules

In a surprise ruling, a federal judge in Texas today issued a nationwide injunction preventing the new overtime rules issued by the Department of Labor from going into effect on December 1.  Twenty-one states had filed suit against the U.S. Department Labor challenging the validity of the new rules.  In granting the request for a preliminary injunction, U.S. District Judge Amos Mazzant decided that the states were likely to succeed in their challenge and that there would be irreparable harm if the rules were allowed to go into effect next month.

As discussed in prior posts, the rules would have implemented a new minimum salary threshold of $913/week for employees falling within the “white collar” exemption under the Fair Labor Standards Act.

Although it is clear that the rules will be delayed as a consequence of the ruling, it is not clear whether this delay will be measured in weeks or months.  It also is possible that the injunction may lead the incoming Trump administration to roll the rules back in their entirety or to implement one of the compromise positions urged on the administration by business groups.

Until further action by the court or the Department of Labor, employers who have not yet taken steps to comply with the new overtime rules may want to put any contemplated changes on hold.  We will provide further information about developments in this area as soon as they occur.

 

New Overtime Regulations Effective December 1st: Are you ready?

The new salary minimum for employees to be considered exempt under the White Collar exemptions becomes effective in just 7 business days.  Companies that haven’t already taken steps to confirm compliance and plan for this change need to act quickly to meet this deadline.  While litigation seeking to stop the regulations is still pending, it is likely that the regs will go into effect as scheduled on December 1st.

As we’ve previously reported, the new regulations more than double the salary minimum for the Executive, Professional and Administrative exemptions from $455/week ($23,660/year) to $913/week ($47,476/year).  The new regulations also increase the minimum salary for the Highly Compensated Employee exemption (though employers should keep in mind that some state minimum wage laws, including Illinois’, don’t adopt the Highly Compensated Employee exemption).

Employers need to act now to confirm that all employees who are classified as exempt under the White Collar exemptions are paid at least the new salary minimum.  Likewise, to the extent that the new regulations have led you to reassess other employees’ exempt status, it is important to act before they become effective.

We would be happy to answer any questions you might have regarding how employees are classified, the logistics of converting employees to non-exempt status and recording their time, and other related issues.