On Tuesday, November 22, 2016, a federal judge in Texas issued a nationwide preliminary injunction delaying the implementation of new overtime regulations increasing the minimum salary threshold for exempt executive, administrative, and professional employees from $455 per week to $913 per week, which were scheduled to take effect on December 1, 2016. In reaching this decision, the judge determined that the federal Department of Labor had overstepped its authority in establishing the salary threshold. It remains to be seen how long the injunction will remain in effect, and when or whether the new overtime regulations will be implemented. We will issue additional updates as this situation unfolds.
For the time being, the current requirements for exempt status remain in effect. Under these requirements, executive, administrative, and professional employees must not only be paid the minimum of $455 per week on a salary basis, but they must also satisfy specific job duties tests. Employees who do not meet these standards are entitled to be paid overtime if they work more than 40 hours in a work week.
Many employers have included audits of current employee classifications in their preparations for the implementation of the new regulations. To the extent that employers determine that employees should be reclassified because they do not satisfy the job duties tests, the injunction does not impact that process.
Melissa Calhoon Jones, chair of the Labor and Employment Group, counsels companies on employment, labor, and immigration issues. For more information about overtime, exempt/nonexempt classification and other employment concerns, please contact Ms. Jones at 410.752.9765 or via email.
This alert has been prepared by Tydings for informational purposes only and does not constitute legal advice.