Last week, a Texas federal judge temporarily blocked the federal Department of Labor’s proposed overtime regulation that would have increased the number of employees eligible for overtime pay by increasing the salary level for the “white collar” exemptions to $47,476 per year.

Under the FLSA, employees must be paid time and a half of the employee’s regular hourly rate for each hour worked over 40 hours a week, unless the employee falls within an exemption from overtime by meeting the criteria for salary and duties.  As it stands, to qualify for a white collar exemption, the employee must meet the minimum salary level of $455 per week or $23,660 per year.  The proposed regulation would have doubled that minimum salary level, allowing fewer employees to be exempt. The regulation would have also raised the salary used for “Highly Compensated Employees” from the current threshold of $100,000 to the 90th percentile of average weekly salaried earnings – about $122,000.

Under the FLSA, employees must be paid time and a half of the employee’s regular hourly rate for each hour worked over 40 hours a week

In blocking the regulation until trial, a Texas court reasoned that the DOL exceeded its authority by imposing an increased salary level that would supersede consideration of the employee’s actual duties when determining whether employees fell within the overtime exemption.  In light of the Court’s concerns, the Court ordered a preliminary injunction to stop the rule from going in to effect on December 1, 2016, as planned.

Going forward, it remains to be seen how the DOL will respond to the injunction.  Though the DOL may take steps to challenge the Court’s decision before President Obama’s term expires on January 20, 2017, given such a short time span, it is not likely that the rule will go in to effect this year.

For now, employers should continue to abide by the current overtime rules and await further developments.  Employers who were planning to implement changes based on the projected impact of the proposed regulation may choose to reconsider their plans.

We are closely tracking the status of the rule and will circulate updates on any changes as they develop.  If you have questions, please contact a member of our team.  For more details, see our previous write-up here.

 

 

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Photo of Michael C. Harrington Michael C. Harrington

Michael Harrington is the chair of Murtha Cullina’s Labor and Employment Group, and assists a wide variety of public and private employers on all aspects of the employment relationship. Mike works with clients in all industries including retail, health care and long term care, energy, and manufacturing. In addition to appearing in state and federal court, he represents clients at the Connecticut Commission on Human Rights & Opportunities, the Connecticut Employment Security Division, the Connecticut Workers’ Compensation Commission, the Connecticut Department of Labor, the National Labor Relations Board and OSHA/ConnOSHA. He regularly represents employers in grievance and interest arbitrations before the State Board of Mediation and Arbitration and before arbitrators of the American Arbitration Association. In addition, he has defended employers in unfair labor practice/prohibitive practice charges and has represented parties before the Freedom of Information Commission. Mike has argued numerous cases before the Court of Appeals for the Second Circuit, the Connecticut Appellate Court, and the Connecticut Supreme Court.

Photo of Madiha M. Malik Madiha M. Malik

Madiha Malik represents clients in a wide range of civil matters, with an emphasis on labor and employment law.

Madiha received her B.A. from the George Washington University where she received degrees in Journalism and International Affairs, and earned her J.D. from the University of Connecticut School of Law.  During law school, Madiha served as a Law Clerk at the U.S. Department of Justice Federal Tort Claims Act Section and held an externship at the United States Attorney’s Office for the District of Connecticut in the Civil Division. Madiha was an Editor for the Connecticut Law Review and authored a published Note titled, “The Legal Void of Unpaid Internships: Navigating the Legality of Internships in the Face of Conflicting Tests Interpreting the FLSA.”

Madiha is a member of the South Asian Bar Association of Connecticut and serves as a law student mentor for the Lawyers Collaborative for Diversity.