The U.S. District Court for the Eastern District of Texas issued a preliminary injunction last week preventing implementation of the Labor's (the Department of Labor) final rule increasing the executive, administrative, and professional exemption thresholds for overtime pay requirements.
The new regulations doubled the threshold from $455 per week ($23,660 per year) to $913 per week ($47,476 per year). It was set to take effect this week on December 1st.
The Court found that DOL had exceeded its delegated authority and ignored Congress's intent by raising the minimum salary threshold by replacing a "duties" test with a de-facto salary only test.
Contractors that have been preparing for the final rule need make any changes at this time. For contractors operating under the Service Contract Act (SCA), coverage will remain unchanged.
It is expected that DOL will file an appeal to stay the decision. We'll let you know if that happens.
The other uncertainty here is what the new Administration plans to do with this and other rules based on Executive Orders. It is possible that many will be overturned come January. Stay tuned.
You can read the full Court Memorandum Opinion and Order here.