In a surprising decision, last night the U.S. District Court in Texas granted a preliminary injunction against the FLSA overtime rule. This ruling effectively nullifies, for now, the changes to the FLSA made earlier this year, and employers will no longer be required to meet the December 1 deadline. This is the equivalent of a buzzer beater – an early holiday present for employers who were opposed to or had concerns with the new regulations. While the lawsuit was filed by 21 states and a variety of employer groups, the preliminary injunction applies nationwide.
The DOL’s rule was set to increase the salary level exemption to $47,476, more than doubling the current threshold, creating concern among various public and private groups. Many had hoped that nonprofits and associations would receive an exemption from the original rule, and this preliminary injunction provides just that. With a new likely-to-be business-friendly Department of Labor Secretary appointment pending, there’s no saying how soon a revised ruling may be addressed.
What are employers to do now? If you’ve already adjusted employees’ salaries or shifted their FLSA status, going back is a slippery slope and is not advised. If you were preparing to make the adjustments on December 1, you can temporarily hold off until any further litigation is sorted out. But our advice is to keep your plans handy should you need to make the adjustments in the future.