On Thursday, August 31, a Federal Court Judge in the Eastern District of Texas issued a ruling that the salary changes to the Fair Labor Standards Act (FLSA) regulations are invalid. The new regulations, if they had become effective, would have doubled the salary threshold for exempt employees from $455 per week or $23,660 per year to $913 per week or $47,476 per year. Previously, this same court issued an injunction that stopped the regulations from going into effect as scheduled on December 1, 2016. It is unlikely that the Trump administration will appeal this ruling.
The court found that the Final Rule is unlawful because the new FLSA regulations depend predominately on a minimum salary level and will exclude many employees who perform exempt job duties.
Therefore, it appears that the old salary standard, which has been in place since 2004, will remain in effect. Under this rule, workers are exempt from the overtime pay requirement if:
- they are paid a minimum salary of $455 per week or $23,660 per year
and
- their job duties fit the FLSA’s definitions of executive, administrative, and professional categories.
Employers should keep in mind that any employee they classify as exempt from overtime must meet the duties of one of the Department of Labor’s exemption categories:
https://www.dol.gov/whd/overtime/fact_sheets.htm.
https://www.dol.gov/whd/overtime/fact_sheets.htm.
The Department of Labor will be strictly scrutinizing employees’ duties performed to ensure they are properly classified as exempt.
For more information about the FLSA regulations, contact employment attorney Elaina Smiley at [email protected] or 412-456-2821.
This material is for informational purposes only. It is not and should not be solely relied on as legal advice in dealing with any specific situation.
