The proposed overtime rules will not go into effect on Dec. 1. In a closely-watched case brought by 21 states (and joined by numerous business organizations) challenging the Department of Labor’s (DOL) rule amendment which would have roughly doubled the minimum salary threshold for many employees to be considered exempt from federal overtime requirements (set to take effect Dec. 1, 2016), a Texas federal court, on the evening of Nov. 22, issued a nationwide order enjoining the DOL “from implementing and enforcing” its new rule. Importantly, for employers who have spent considerable time and resources auditing their workforces in anticipation of the new rule, and on the basis of that have determined to reclassify previously exempt employees because their duties are not sufficient to have the individual qualify as exempt, the injunction does not impact any potential reclassification decisions that were based on the duties employees perform. Rather, the injunction impacts only those employees who are performing exempt duties, but would have fallen below the new salary threshold. Nonetheless, while many questions remain, for now at least employers can “stand down” from steps they were preparing to take to come into compliance with the amended rule.
