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New FLSA Overtime Rules Put on Hold


November 28, 2016 by Paul Sullivan
Category: FLSA

New FLSA Overtime Rules Put on Hold

Note: This blog addresses an emerging issue. We will update this blog post as new information from the U.S. District Court for the Eastern District of Texas and the U.S. Department of Labor becomes available.

In May, the U.S. Department of Labor adopted final overtime rules for white collar workers, which would increase the salary standards for determining if an employee would be eligible for overtime. The rules, previously scheduled to go into effect December 1, 2016, have been put on hold due to a preliminary injunction from the U.S. District Court for the Eastern District of Texas that delays their implementation indefinitely pending further action by the court. In delaying their implementation, the court concluded that issuance of the rules exceeded the Department of Labor’s authority.

The rules, were they to go into effect December 1, would make over four million more employees eligible for overtime pay under the Fair Labor Standards Act (FLSA). Specifically, the final overtime rules would, if implemented, change the “salary test” for “white collar workers” and “highly-compensated employees.” Under the new rules, the salary threshold to be exempt from the FLSA’s overtime requirements would increase from $23,660 per year ($455 per week) to $47,476 annually, or $913 per week. The rules would also increase the annual compensation threshold for “highly compensated employees” from $100,000 to $134,004 and would also update the salary and compensation levels every three years.

Due to the preliminary injunction, however, these increases will likely not occur on December 1.

In anticipation of the new rules, some employers have already either increased salary allocations for overtime purposes or have increased salaries for employees who would have been affected by the new rules. While nothing prevents employers from increasing salaries, that act may no longer be required in order to respond to the Department of Labor’s now enjoined final overtime rules.

Although Washington State is not a party to the lawsuit for which the preliminary injunction was issued (21 other states filed the lawsuit), the court’s order was issued on a nationwide basis, thus presumably including Washington in the order. However, we recommend consulting with your agency's attorney to determine the applicability of the injunction to your jurisdiction.

The court will hold a hearing in the future to determine whether the rule’s implementation should be permanently enjoined. Regardless of the court’s ultimate decision, Congress and the President have the authority to address this issue legislatively.

If you have questions regarding the new rules and the federal court’s decision, we want to help. So, don’t hesitate to ask MRSC or let me know in the comments below or by contacting me directly at psullivan@mrsc.org.

About Paul Sullivan

Paul has worked with local governments since 1974 and has authored MRSC publications on local elections, ordinances, and general local government operation. He also provides training on the Open Public Meetings Act.

VIEW ALL POSTS BY Paul Sullivan

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