Court Injunction Puts New FLSA Overtime Regulations On Hold


On November 22, 2016, the federal district court for the Eastern District of Texas granted a preliminary injunction, effectively stopping the implementation of the FLSA overtime regulations, which were scheduled to go into effect on December 1, 2016.

For the moment, the existing overtime rules and regulations will continue and there will be no changes required.

It is anticipated that there will be an appeal of the decision but there is no way to predict when a decision might be reached. In addition, it is unclear whether the new Trump Administration will support the proposed FLSA overtime regulations.

Will Your Exempt Employees Pass The New Test?

Exempt employees are those who are exempt from the overtime provisions of the Fair Labor Standards Act - the "white collar" employees. On December 1, 2016, the salary basis and salary level tests for a white collar employee changes dramatically.

To be exempt after December 1, a white collar employee generally must:

• be salaried, meaning that they are paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed (the "salary basis test");

• be paid more than a specified weekly salary level, which is $913 per week ($47,476 per year) (the "salary level test"); and

• primarily perform executive, administrative, or professional duties,as defined in the Department's regulations (the "duties test").

While employees like doctors, teachers and lawyers are not subject to these tests, for the others, an employer will be required to pay overtime – at least 1.5 times the hourly wage for every hour worked over 40 – if an employee is not paid $913 per week regardless of their duties.

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