The Employer’s Wage and Hour Advisor

A hot topic in 2016 was the implementation of new regulations more than doubling the minimum required salary amount for the executive, administrative and professional exemptions under the Fair Labor Standards Act (FLSA). In late November 2016, a federal court in Texas enjoined the rules from taking effect, and in December, President Obama’s administration appealed that ruling.

On February 22, 2017, the Fifth Circuit Court of Appeals extended the deadline for the Department of Justice (DOJ) to submit its arguments, so that the Trump administration could determine its position on the proposed salary rule. The DOJ’s submission is now due on May 1, 2017.

In the meantime, the 2016 overtime rules remain stayed, and employers are not currently required to comply with them. The Trump administration has not stated whether it will defend the new rules and continue the appeal, nor has it stated that it will abandon the effort to increase the required salary amount. A recent White House memorandum instructing federal agencies to cease issuing new regulations and reevaluate rules that have not already gone into effect could further complicate the status of the new overtime rules, even if the DOJ pushes forward with the appeal or the court lifts the injunction.

For the time being, employers remain in the same difficult position they were in at the close of 2016. Having planned for a significant change in the federal overtime rules, they now must wait to see if those rules will ever take effect. Nevertheless, companies should work with their Labor and Employment counsel to prepare for whatever decision is reached by the courts or any subsequent action by the Trump administration or Congress to address the FLSA exemptions.