While employers took solace from the Nov. 22 nationwide preliminary injunction which blocked implementation of a controversial rule increasing the salary threshold for employees to be exempt from overtime, the battle is not over. The Department of Labor filed its notice of appeal December 1, the same day the new salary regulations were to take effect.
As discussed in our previous HR Defense blog post, on November 22, 2016, a Texas court enjoined the new rule which would have made an estimated 4 million workers eligible for overtime by increasing the salary threshold for exempt employees to $47,476, more than double what it had been. The court said that Congress intended the “white collar exemptions” – executive, administrative and professional– to apply to employees doing actual executive, administrative and professional duties, without reference to a minimum salary level. With the new rule, the court said that the DOL “exceeds its delegated authority and “ignores Congress’s intent by raising the minimum salary level such that it supplants the duties test.” Because the court found the final rule unlawful, the court concluded that the DOL was without authority to implement the automatic updating mechanism as well.
The injunction was issued in a consolidated case that included 21 state plaintiffs who challenged the rule as to state employers, and about 50 business organizations...
