23 November 2016

Court Blocks New Overtime Rule: Employers Relieved of December 1 Deadline

At the eleventh hour, a federal court has relieved employers from making major pay changes to comply with the new overtime rule issued by the U.S. Department of Labor. The rule, which was set to take effect December 1, would have raised the minimum salary for white-collar exempt employees to $913 a week.

Late Tuesday, November 22. 2016, the court issued a preliminary injunction stopping the DOL from implementing the rule. The injunction applies nationwide, to all private and public employers subject to the Fair Labor Standards Act. The DOL projected that the rule would have caused millions of exempt employees to become subject to overtime and would have required employers to begin recording their work hours.

The court’s preliminary injunction is not the final decision on this issue. The Department of Labor might choose to contest this decision through further litigation. Or, because of the upcoming change in administrations, the DOL may choose to abandon the fight. Either way, employers who were planning to change employees’ pay or status to comply with the rule no longer need to do so.

If you have any questions about the FLSA rule in light of this news, please contact any Miller Johnson employment attorney or a member of Miller Johnson’s Wage and Hour practice group.