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DOL Enjoined From Implementing New Minimum Salary Level Regulations on December 1, 2016

Yesterday afternoon, the U.S. District Court for the Eastern District of Texas entered an order enjoining the implementation and enforcement of U.S. Department of Labor (DOL) regulations which change the minimum annual salary level required for overtime exemption to $47,476.

As we previously reported here, the new regulations (set to take effect next week, on December 1, 2016) nearly double the minimum annual salary level required from the current level of $23,660, for nearly all employers.
Twenty-one states filed suit (in State of Nevada et al. v. U.S. Department of Labor, No. 4:16-cv-00731-ALM) and sought an Emergency Motion for Preliminary Injunction, arguing that DOL lacked statutory authority for the new salary level and the automatic updating mechanism. The court agreed and ordered a nationwide injunction.

What does this mean? Pending further action by the court, the December 1, 2016 implementation date is postponed, which means that your business is not obligated to comply with the new salary level requirement on December 1, 2016. What will follow is uncertain, so it would be prudent to monitor any further developments in this case closely.

If your business already has implemented changes in anticipation of the December 1 deadline, you will need to evaluate carefully whether it makes business sense to undo the changes, particularly if that calls for taking back salary increases, which may present challenging employee morale issues.

© 2019 Neal, Gerber & Eisenberg LLP.

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About this Author

Jason C. Kim, labor and employment attorney, Neal Gerber law firm
Partner

Jason C. Kim represents employers in all aspects of labor and employment law. He defends employers in arbitration and litigation matters brought under a variety of employment-related statutes, including the Fair Labor Standards Act (FLSA), Title VII, the Family Medical Leave Act (FMLA), the Age Discrimination in Employment Act and the Americans with Disabilities Act. He represents and counsels clients in the full range of traditional labor matters, including litigating unfair labor practice cases before the National Labor Relations Board, negotiating labor contracts, assisting in...

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William J. Tarnow II, Labor & Employment attorney, Neal Gerber law firm
Partner

William J. Tarnow II is chair of the firm’s Labor & Employment Practice Group and represents and counsels companies and management in all facets of business and employment law and employment-related litigation before federal and state courts and administrative agencies.

Bill has litigated a variety of disputes, ranging from trade secret, breach of fiduciary duty, restrictive covenants and breach of contract disputes, to claims of discrimination, harassment and retaliation under various statutes such as Title VII, the ADA and the ADEA in venues around the country. Bill also has defended a number of employers in both single-plaintiff and class action cases involving wage and hour / overtime pay claims under both state and federal laws.

Bill regularly makes presentations on a variety of employment law issues, both to individual employers directly and to large groups in seminar settings. He serves as a speaker in the PLI Employment Law Program on topics such as whistleblowing and retaliation lawsuits. Bill regularly publishes articles and presents seminars and training on a variety of employment issues, and he has been contributing author to multiple Illinois editions of The Law Guide.

312-269-8489