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Labor & Employment Law Alert: Injunction Issued on FLSA Exemption Changes

November 23, 2016

On November 22, 2016, a U.S. District Court Judge in Texas issued a nationwide preliminary injunction blocking the U.S. Department of Labor’s new regulations that would significantly change the exemption requirements under the Fair Labor Standards Act (FLSA).  The regulations were to take effect on December 1, 2016.  The regulations were challenged by 21 states and the U.S. Chamber of Commerce.
 
As we have explained in previous e-alerts and in several seminars, the sweeping changes to the regulations would double the minimum salary threshold from $455 (annualized to $23,660) to $913 per week (annualized at $47,476) for employees to qualify for the “white collar” exemptions under the FLSA.  This change affects many of our clients, especially in the nonprofit sector.  We have worked with many of you to make the appropriate changes to comply with the new rules.
 
This injunction means that the DOL is prohibited from enforcing the new rules at this time. The ruling is preliminary and is subject to further proceedings in the Texas court, and then may be appealed.  But it is difficult to predict how the litigation will proceed given the upcoming changes at the U.S. DOL and the Department of Justice resulting from the election of President-elect Trump.
 
Employers who have not yet implemented changes in anticipation of the rule may proceed or put those changes on hold. Employers who already have made or communicated changes and are considering undoing those changes, should proceed carefully. Employers should consider, among other factors, how any decision will impact employee relations. Our employment attorneys are available to assist employers in this analysis.
 
If you have any questions, please contact any member of the Carmody Torrance Sandak & Hennessey Labor and Employment Practice Group for more information:  

D. Charles Stohler
(203) 575-2626; cstohler@carmodylaw.com

Giovanna T. Weller
(203) 575-2651; gweller@carmodylaw.com

Domenico Zaino, Jr.
(203) 578-4270; dzaino@carmodylaw.com
 
Howard K. Levine
(203) 784-3102; hlevine@carmodylaw.com

Maureen D. Cox
(203) 575-2642; mcox@carmodylaw.com

Vincent Farisello
(203) 578-4284; vfarisello@carmodylaw.com

Sarah S. Healey
(203) 578-4225; shealey@carmodylaw.com

Mark F. Williams
(203) 575-2618; mfwilliams@carmodylaw.com