FLSA Injunction on Salary Threshold for Exempt Employees
Client AlertA November decision issued by the Eastern District of Texas officially “vacated” the Department of Labor’s Final Rule, nationwide, raising the salary threshold for exempt employees. Interestingly, the Court decided to vacate the rule and “set it aside,” rather than issue an injunction based on a directive from the Fifth Circuit that calls for “illegal agency action” to be nullified and revoked, rather than stayed. The decision can be located here: https://www.cupahr.org/wp-content/uploads/OT-SJ-Decision.pdf
What does this mean for employers?
- January 1st salary increase requirement for exempt employees will no longer be required, and employers will not be required to raise salaries to maintain the exemption status.
- The Court also held that the July 1st increase requirement was similarly unlawful and; therefore, employers who did raise employees’ salaries could theoretically drop them back to, at or above, $35,568 and still maintain the exemption.
Although the Department of Labor could appeal this decision to the Fifth Circuit, such appeal would not conclude by January 20th when it is expected that Trump’s AG/DOL would drop the appeal.
If your clients would like to further discuss how this ruling impacts them or how to unwind previous changes, please do not hesitate to contact Bryan Meek at 330.253.5586 or bmeek@bmdllc.com.