Overtime Rule Stayed by Judge in Texas

On November 22, 2016, a Texas federal judge issued an Order that blocks nationwide the new Fair Labor Standards Act salary requirements for overtime and minimum wage exemptions based on executive, administrative, or professional capacity. The regulations were to take effect on December 1, 2016, but have now been blocked. Therefore the higher salaries set by the Department of Labor for these exempt employees will not become effective December 1, 2016. Litigation will continue on the issue. Ultimately a permanent injunction could be ordered. It is also possible that ultimately the Department of Labor will prevail and at some future date, the new salary rule will become effective. In addition, there is legislation pending in Congress that could also impact the salary exempt issue.

At this time, the order allows employers to maintain the status quo. Maintaining the status quo also leaves in place the current minimum salary level of $455 per week for these exemptions. However, any employer that has already analyzed the duties performed by any employee and determined that the employee does not perform exempt duties, must still treat that employee as non-exempt. Thus, this employee's hours must be tracked and he/she must be paid overtime for hours work in excess of forty hours.

If you, as an employer, still need to analyze whether your employees would have been affected or would like to further discuss this issue, please do not hesitate to contact a member of our Employment Law team.

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