23 November 2016

Employment alert: Texas federal court ruling halts implementation of new FLSA regulations across the US

On November 22 2016, the United States District Court, Eastern District of Texas, granted a nation-wide preliminary injunction halting the December 1, 2016 deadline for implementing new overtime regulations under the FLSA. Under the new regulations, employers were required to compensate those employees classified as exempt from overtime with a minimum weekly salary of $913 per week ($47,476 annually for a full-year worker), or re-classify those employees as non-exempt, entitling them to overtime wages for hours worked above 40 in a given workweek. The new regulations also increased the minimum Highly Compensated Employees' salary from $100,000 annually to $134,004 (the annual equivalent of the 90th percentile of full-time salaried workers), and provided for automatic updating of compensation levels every three years. The new regulations had the potential to impact nearly 4 million workers. The lawsuit, seeking emergency preliminary injunction, was filed by 21 states and various employer groups.

In his decision, Judge Amos Mazzant, appointed by President Obama, found that the plaintiffs had established a prima facie case showing that the final regulations and the automatic updating of the salary levels were made “without statutory authority,” and that, the balance of hardships weighed in favor of granting the injunctive relief.

Accordingly, employers now have a reprieve from implementing the new regulations by the December 1, 2016 deadline, and the Court will have the opportunity to hear and consider the merits of the case.

If you have questions about how this federal court ruling will affect you, please contact Brooke A. Schneider of our employment team or your Withers attorney.


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