DOL Overtime Rule Blocked, Part 2

Last week, we posted about the injunction that stops the DOL’s new overtime rule from going into effect on December 1, 2016. In Judge Mazzant’s decision, he found the significant increase to the salary level (without changing the duties tests) “creates essentially a de facto salary test… [and that] Congress did not intend salary to categorically exclude an employee with [Executive, Administrative, Professional] duties from the exemption.”  Basically, since the FLSA exemptions depend on BOTH the duties employees perform and on the salary they receive, the Court found the DOL exceeded its authority under the FLSA by basing the rule solely on a change to the salary level.

There is no clear answer on what employers who have already reclassified employees from exempt to non-exempt should do following the decision. In fact, the only consistent answer seems to be that employers are in limbo and should be careful about making further changes until the issue is resolved by the courts, by some kind of legislative compromise, or some executive action.

We will continue to update the blog on this issue.

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