Providing employers with a piece of good news, a Texas court has issued a nationwide preliminary injunction that delays the December 1 implementation of the controversial final rule that increased the salary level for exempt employees to $47,476, almost double what it had been. The court found that the 21 states challenging the rule showed both that they were likely to succeed on the argument that the Department of Labor’s salary level under the rule and the automatic updating mechanism are without statutory authority, and that they would suffer irreparable harm. Conversely, the court said that the DOL failed to show harm if implementation were delayed until a final hearing.
This is good news for employers who may have been facing significant increases in salary to maintain exemptions or reclassifying employees to comply. The Court found this rule essentially created a de facto salary test that supplanted the duties component enacted by Congress. Reasoning it was Congress who would need to make that determination, not the DOL, and that the balance of hardships weighed in favor of delay, a nationwide preliminary injunction was issued.
While the fight is not over, the December 1 compliance deadline has been delayed and employers do not yet have to make drastic changes.