Far Labor Standards Act

New Overtime Rules Blocked by Judge

On November 22, 2016, a federal judge in Texas issued a nationwide injunction that blocks the implementation on December 1st of the Department of Labor's proposed changes to the salary test under the Fair Labor Standards Act ("FLSA"). In sum:

1. At present any employee who earns an annual salary of $23,660 ($455 per week) and who satisfies one of the duties tests (ex. executive, administrative) is an exempt employee who is not eligible for overtime for hours worked over 40 hours in a workweek.

2. The injunction means that the salary test will not change on December 1st, at least if the injunction is not overruled by a higher court.

3. Therefore, by federal law, at least, on December 1st employers need not make changes in categorizing employees as exempt or non-exempt.

Employers should continue monitoring the news for updates. It is possible the Department of Labor may appeal this decision and seek an expedited appeal. Employers should be prepared that this might happen and for the time being be prepared to comply with the proposed FLSA changes if the injunction is lifted.

It is recommended that employers consult with their local attorneys on the impact of this injunction. In addition, employers should consider whether to implement changes passed on to employees, such as planned pay increases. Withdrawal of such plans may have legal implications and will likely impact morale.

Michael K. Kirk
Associate General Counsel
Legal & Risk Management Services
Presbyterian Mission Agency
Presbyterian Church (U.S.A.)
100 Witherspoon Street, Room 5625
Louisville, Kentucky 40202-1396

(502) 569-5278 (direct)
(502) 569-8033 (fax)
(502) 777-5296 (cell)