Yesterday, the U.S. District Court for the Eastern District of Texas issued a preliminary injunction blocking the new “white collar” overtime regulations from going into effect on December 1st. While the judge considers the arguments for and against the legality of the new regulations, employers may continue to follow the existing overtime regulations.
The Obama administration issued the new Fair Labor Standards Act (FLSA) white collar regulations on May 18, 2016. These regulations were scheduled to go into effect on Thursday of next week (December 1, 2016), and would increase the salary level for the white collar exemptions to $913 per week, or $47,476 on an annualized basis, and impose increases tied to inflation every three years. The white collar regulations were to apply to the exemptions to executive, administrative, and professional employees, and to highly-compensated employees.
The Court blocked the regulations based on a lawsuit filed by the U.S. Chamber of Commerce and twenty-one states claiming that the FLSA does not authorize the salary-level test or the rule’s automatic increases of the salary threshold and invaded state sovereignty in the rule’s application to state employees.
Many observers have predicted that a preliminary injunction would not issue and the regulations would go into effect December 1st. The decision by the Court may not indicate that it intends to permanently block the regulations. However, the preliminary injunction does suggest that the Court is seriously considering the plaintiffs’ arguments against the regulations.
Additionally, many people have wondered if the Trump administration will roll back the white collar regulations. While some have expected major changes to the regulations by the Trump administration, many have expected that any changes will not roll back the regulations as a whole. Instead, it is more likely that the Trump administration will provide exemptions to the increased salary level for certain employers, like small business, and reduce or eliminate the automatic increases to the salary level.
As of right now, employers have received at least a short delay from complying with the new white collar regulations. However, it remains to be seen how long the reprieve will last.