update

By Erin Henry, Servant Leader ITsHRc, LLC

After 21 states and 55 business groups filed a lawsuit against the United States Department of Labor (DOL) in September to block the new regulation regarding Exemption Status raising the minimum salary of exempt employees from $23,660.00 a year to $47,476.00 a year to take effect December 1, 2016, a U.S. District Judge in Texas, Amos Mazzant on November 22, 2016 imposed an injunction against the DOL.

What does this mean for employers?  For now, the existing ruling regarding overtime (last updated in 2004) and amount of $23,660 will remain in effect and employers do NOT have to change anything.  However, if you are an employer who has already reclassified employees from Exempt to Non-Exempt and implemented new time keeping, reporting, and overtime rules, there is no need to disrupt your workforce.  As well, if you have increased base salaries of employees in order to maintain exemption, the psychological effects of reverting back may not be worth disrupting the morale of your workforce. 

The “duties test” has remained the constant in either ruling and only the salary part ($47,476.00) of the May 2016 ruling is what changed.  The concern Judge Mazzant imposed this injunction is if the DOL had the right to supersede the authority and intent Congress granted when it adopted the new regulation.  Mazzant wrote: “The {DOL’s} role is to carry out Congress’ intent.  If Congress intended the salary requirement to supplant the duties test, then Congress, and not the Department, should make that change.”

While this is not a final decision, as an injunction is not permanent, it means that we’ll have to ‘wait and see’ how this plays out.

If your organization has questions about the impact or next steps, contact ITsHRc, LLC today!