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December 1, 2016 Deadline Defunct: Federal Judge Blocks US Department of Labor Exempt Salary Increase

Yesterday, U.S. District Court Judge Amos Mazzant issued a nationwide preliminary injunction blocking the U.S. Department of Labor’s controversial rule which was slated to increase the minimum exempt salary requirements on December 1, 2016.  The rule was scheduled to raise the minimum exempt salary for executive, administrative and professional employees under the Fair Labor Standards Act (FLSA) from $23,660 to $47,476 per year.

The Texas federal judge concluded that the 21 states and numerous business groups that had filed suit had a significant likelihood of succeeding on the merits and would suffer serious financial harm if the DOL rule went into effect on December 1, 2016.  Judge Mazzant also ruled that the DOL exceeded its delegated statutory authority by adopting a rule that significantly increased the minimum exempt salary requirements. 

Although the FLSA exempt salary requirements will not increase on December 1 (unless an appellate court intervenes), California employers are reminded that they must still pay exempt employees a salary equal to twice the minimum wage (i.e. $41,600 annually) to meet California’s exemption requirements.  Moreover, the California minimum salary requirement will increase on January 1, 2017 to $43,680 for many exempt employees.  The current exempt salary requirement will remain unchanged through 2017 for employers with 25 or fewer employees.

If you have any questions about this important development, please contact any member of our team.

 

Although the information contained herein is provided by professionals at Procopio, the content and information should not be used as a substitute for professional services.  If legal or other professional advice is required, the services of a professional should be sought.