However, just days before the effective date of the new rule, a federal judge in Texas has issued a preliminary injunction against the Department of Labor (“DOL”) in regard to the new FLSA regulations. Twenty-one states had filed an emergency motion for a preliminary injunction, and the cases were consolidated last month.
By definition, an injunction is only a temporary halt that preserves the status quo until either the stay is lifted, or a decision is made in the case. As a result, the existing overtime rules, including the salary threshold of $23,660, remain in effect for the time being. But employers should not assume that the changes to FLSA will be permanently defeated, and should remain prepared to move forward in complying with the new rules.
In the previous months, employers may have taken action in anticipation of the December 1 effective date. With the injunction in place, the opposition to the FLSA changes is not meritless. But during this time, there are a number of important items to be considered:
Keep in mind that the injunction is only a temporary halt, so it may be wise for employers to make no further changes or reversals until the issue is decided. With that said, these FLSA changes were put into place via executive order by President Obama. If the changes are ultimately upheld by the courts, it is unclear what action President-Elect Donald Trump and the new administration would take, if any; whether that be leaving the new rules in place, limiting the impact of the new rules, or working to rescind the changes altogether.
For more information or questions, please reach out to our National Tax Services Team at firstname.lastname@example.org.
|CJ Stroh, Esq.
T (609) 520 1188
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