On Wednesday, February 22, 2017, the Fifth Circuit Court of Appeals granted the Justice Department’s request for a 60-day extension to determine its position on the new FLSA overtime exemption rules. The stated reason for the government’s unopposed request was to allow incoming leadership adequate time to consider the issues.
On November 22, 2016, a federal judge in Texas blocked the U.S. Department of Labor’s (USDOL’s) overtime rule from taking effect on December 1, 2016. The means that the judge agreed with arguments made by concerned states and business groups and issued a preliminary injunction, thus preventing the rules from being implemented on a nationwide basis.
With changes to the Fair Labor Standards Act (FLSA) and its rules regarding overtime scheduled to go into effect on December 1st, 2016, many employers are understandably anxious and revisiting their understanding of the law and its respective components.
For one, the FLSA will continue to mandate that employees be classified as exempt or non-exempt, but has significantly changed the salary threshold that is required to be qualified as “exempt.” This change will bring with it significant consequences for some businesses. As a result, it’s now more important than ever that employers make this exempt vs. non-exempt determination properly and understand how it impacts their employees and business.
The new overtime rules issued by the Department of Labor (DOL) in May of 2016 are scheduled to take effect on December 1, 2016. Twenty-one states lead by Texas and Nevada as well as a number of business groups have filed separate lawsuits challenging the validity of the new rules in an attempt to block DOL enforcement. They are seeking declaratory judgement and injunctive relief to prevent the implementation of the new rules. Experts however still advise businesses to be prepared for the December 1 effective date because there is no expectation that these legal challenges will be successful.