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Federal judge puts new DOL Salary rules on hold

On November 22, 2016, a federal judge in the Eastern District of Texas granted a motion that temporarily bars the regulations from going into effect nationwide (State of Nevada et al. v. U.S. Department of Labor, Civil Action No. 4:16-cv-00731-ALM). The injunction is expressly nationwide in scope, including and applying to states that did not join in the lawsuit. Accordingly, pending further action, the December 1, 2016 implementation date of the Final Rule is postponed and employers need not adjust salaries upward in order to continue to claim exempt status.

The injunction was entered based on the judge’s conclusion that the DOL Final Rule, raising the salary basis test to $913/week, exceeded the Department of Labor’s delegated authority. Additionally, the judge concluded that DOL did not have the authority to automatically update the minimum salary level every three years. Stay tuned for more news on this important subject.

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