We write to inform you that a federal district court in Texas entered an order on Tuesday, November 22, enjoining enforcement on a nationwide basis of the highly anticipated Department of Labor ("DOL") regulation that would have increased from $23,660 to $47,476 the salary for an employee to be considered exempt under the Fair Labor Standards Act ("FLSA"). Based on the court's decision, this DOL regulation will not go into effect on December 1.
While employers are permitted to increase their employees' salaries if they choose, they are not required to increase an employee's salary up to $47,476 to maintain the employee's exempt status or to reclassify as non-exempt those employees earning more than $23,660 but less than $47,476. Although the salary test is not presently changing, the white collar duties tests under FLSA for an employee to be considered exempt, such as the executive, administrative, and professional exemptions, remain in effect.
The district court's preliminary injunction is not the last word on this matter. The DOL will likely appeal the court's decision in the coming days. Also, we do not yet know what position, if any, the new administration will take on this decision.
The attorneys in Lowenstein Sandler's employment practices group are available to answer any questions you may have about this important decision or any other wage and hour or other compliance matters.
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