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Federal Court Blocks New "White Collar" Regulations

A federal court in Texas has issued an order that blocks—nationwide—the U.S. Department of Labor’s (“DOL”) new regulations that would have doubled the minimum salary for many “white collar” workers on December 1, 2016. While not a final decision in the case, and it remains subject to appeal, the order means that the new regulations and salary increase will not take effect, at least for now.

Practically, the decision will have varying impacts on employers, depending on where they were in preparing for the regulations. For example, it is good news to employers who had not yet taken steps to comply with the new rule. For those employers, there is no change in the law to worry about—yet. Second, for those employers who have taken steps to comply with the new rule by planning to reclassify workers or raising salaries, but have not yet announced those changes, they can stand down for now and make no changes (although we recommend that employers who realized workers were misclassified as exempt based upon their duties irrespective of salary level should go forward with that reclassification).

But for those employers who have already announced changes to employees to be prepared for the new rule, by either reclassifying workers or changing or raising pay, a quite difficult situation may be presented. In that case, employers may be presented with the choice to ignore the order and go forward with the pay changes, despite not being required to, in order to avoid impacting employee morale, or to reverse course and explain to employees that the changes or salary increases will not happen after all (or at least for now).

Copyright © 2022 Womble Bond Dickinson (US) LLP All Rights Reserved.National Law Review, Volume VI, Number 334
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About this Author

Richard Rainey, Womble Carlyle Law Firm, Litigation Attorney
Partner

Richard has extensive experience successfully litigating employment disputes on behalf of employers in the courtroom and before administrative agencies such as the Equal Employment Opportunity Commission, the National Labor Relations Board and the U.S. and N.C. Department of Labor.  His litigation practice also includes actions involving covenants not to compete, theft of trade secrets, unfair competition, employee raiding, fair housing and equal credit. He advises clients on effective and practical methods to prevent exposure to employment law liability under Title VII...

704-331-4967
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