Overtime Rule Enjoined

By Michelle D. Bayer

​Most of you have been preparing for the December 1, 2016 implementation of the Department of Labor’s Final Rule changing the requirements for the overtime exemption under the Fair Labor Standards Act (“FLSA”).  Under the final rule starting December 1, 2016 the salary exemption threshold was to increase to $913 week or $47,476/year and the highly-compensated employee exemption was to increase from $100,000 to $134,004 per year setting the threshold at the 90th percentile of full time salaried workers nationally.

Yesterday, Judge Amos Mazzant of the U.S. District Court for the Eastern District of Texas issued a preliminary injunction blocking the implementation of this change.   The purpose of the preliminary injunction is to preserve the status quo while the court determines the department’s authority to make the final rule as well as the final rule’s validity.

While Judge Mazzant sits in the Eastern District of Texas, his ruling applies nationwide.  So, the changes will not go into effect December 1, 2016.  That does not mean that they may not go into effect at some point in the future.  At this time, there is no way to know.

As of now, the original exemption requirements of $455/week for the salary exemption and $100,000 for highly-compensated employees remain in effect.  If you have already made adjustments to your employees’ compensation in advance of the December 1, 2016 deadline, you can choose to keep the increase in place, or you can go back to the old rate, however; remember, under Michigan law, any compensation changes must be prospective and not applied to any hours already worked under the prior amount.  Any employees who were going to lose the exemption come December 1, will remain exempt.