News & Insights

FLSA Rule Doubling Salary Threshold Is Halted by Preliminary Injunction

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As we have reported, the new federal overtime regulations under the Fair Labor Standards Act, which were scheduled to take effect on December 1, and which among other things would have eliminated exempt status for any employee making less than $47,476, have been in jeopardy due to challenges in court and in Congress. Many employers have been scrambling to come up with a plan to comply with the new regulations. Two of the options discussed include reclassifying certain employees to non-exempt status (recognizing that they will qualify for overtime pay) or increasing their pay – sometimes significantly – to the new salary threshold. Some employers have already implemented their FLSA compliance plans. Many have not.

We previously informed employers of litigation in Texas and legislation in Congress that might halt all of that. Well . . . the implementation of the increase has indeed been delayed pursuant to a preliminary injunction from a federal court in Texas.

The bottom line is employers are not required to implement the pay hikes or reclassification to non-exempt status to deal with the rule implementation that has been coming. For now, nothing changes from how things have been for a long time. The salary threshold for exempt status remains $23,600. But stay tuned as more developments are sure to come.

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