On November 22, 2016, in State of Nevada et. al. v, United States Department of Labor et. al., pending in the United States District Court for the Eastern District of Texas, a Federal Judge issued a nationwide injunction blocking the impending changes to the overtime regulations from going into effect. As you may recall, in May of 2016, the United States Department of Labor (“DOL”) issued a Final Rule consisting of a number of changes to the overtime regulations for what are commonly referred to as the “White Collar” exemptions of the Fair Labor Standards Act (“FLSA”). Among other things, the Final Rule increased the salary threshold for certain White Collar Exemptions from $455/week ($23,660 annually) to $913/week ($47,760 annually). The Final Rule also included a mechanism to automatically update the salary threshold every three years.
In issuing the injunction, the Court reasoned that the DOL’s Final Rule exceeded the authority delegated to the DOL by Congress in the language of the FLSA. More specifically, the Court ruled that “the salary level under the Final Rule and the automatic updating mechanism are without statutory authority.”
Prior to the issuance of the injunction, the Final Rule and its changes to the overtime regulations were scheduled to go into effect on December 1, 2016. Based on the injunction, the changes to the overtime regulations are no longer scheduled to go into effect on December 1, 2016, and are currently on hold.
This decision will almost certainly be appealed, and as such the ultimate outcome on this issue is unclear. We will continue to monitor this situation.