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Fair Labor Standards Rules in Court

Fair Labor Standards Rules in Court

Major changes to the Fair Labor Standards Act’s (FLSA) regulations governing the overtime exemptions for “white collar” workers, (scheduled to take effect December 1, 2016) were blocked by a preliminary injunction issued by a federal district court in Texas on Tuesday, November 23.

The new regulations, which raised the “salary test” for the general “white collar” exemptions, applied to the FLSA’s exemptions for employees in the categories of “executive,” “administrative,” “professional” and “computer.” Current regulations state that in order to be eligible for exemption from overtime, employees in these categories must be paid at least $455 per week. The blocked regulation would have raised this exemption to $913 per week, requiring overtime to be paid to any employees in these categories who earn less than $913 per week.

NADA has advised dealerships NOT to make any changes they may have planned to employees’ wages or pay plans in anticipation of the December 1st effective date, pending resolution of this lawsuit. The injunction issued by the U.S. District Court for the Eastern District of Texas is a nationwide preliminary injunction, which means the Court found there is a likelihood the plaintiffs will prevail and the new regulations will be found invalid. But, this means the litigation will continue until the Court either strikes down the regulations permanently, or finds them to be valid and lifts the injunction which would be a less likely outcome.

Louis Young Louis Young
T (732) 572 3900
lyoung@withum.com

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