In May 2016, we brought you a client alert detailing the U.S. Department of Labor's ("DOL") changes to the minimum salary level for the executive, administrative, and professional exemptions to $913 per week, or $47,476 per year. This new salary threshold was to become effective on December 1, 2016. (The full client alert may be viewed here.)
The DOL's new salary threshold is currently under attack on both the legal front via two separate civil lawsuits and the legislative front as the U.S. House of Representatives has voted on legislation which would delay the regulation's effective date by six months (which the White House promised to veto). Additionally, it is unclear if and how the Trump administration will make changes to the new rules.
Yesterday, November 22, 2016, less than two weeks before the new regulation was to go into effect, a federal judge in Texas entered a nationwide preliminary injunction blocking the DOL from implementing the new salary rule. The judge found that the 21 states challenging the DOL's new regulation were able to show a likelihood of success in their challenge of the rule as well as irreparable harm if it went into effect, while the DOL failed to show it would be harmed if the rule were delayed.
With the nationwide injunction in place, it appears that the December 1, 2016 effective date will be postponed until final disposition of the case, or until the ruling is reversed on appeal. The last-minute injunction, however, will put some employers in a difficult situation. Some employers likely have already increased exempt employees' salaries or converted them to non-exempt and might very well want to keep those changes in place. Others might want to delay implementing the changes or even reverse the changes given the uncertain state of the law.
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