In an eleventh-hour decision, a Texas federal judge has temporarily blocked the Department of Labor's (DOL) Final Rule increasing the minimum salary for exempt (salaried) employees from $26,660/year to $47,476/year. In the days ahead of this important ruling, employers were finalizing tough decisions regarding whether to increase exempt employees' salaries or reclassify exempt employees as nonexempt and overtime-eligible. The DOL Final OT Rule was set to take effect next week on December 1, 2016.
The U.S. District Judge in Sherman, Texas, agreed with 21 states and business groups, including the U.S. Chamber of Commerce, that the DOL Final OT Rule is unlawful. As such, the court granted their motion for a nationwide injunction. The future of the rule changes is now in doubt. While the Texas case is ongoing, the DOL can appeal the court's decision, but the Trump Administration could drop any appeal after President-elect Trump takes office in January.
If you have already implemented or communicated changes in preparation for the DOL Final OT Rule (i.e., salary increases and/or reclassification changes), it is critical you make prompt decisions about whether to retract such employment decisions given the legal change. We are available to help you understand your options.
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