CLIENT UPDATE

Putney, Twombly, Hall & Hirson LLP
521 Fifth Avenue
New York, NY 10175
Tel: (212) 682-0020

 

November 23, 2016

United States District Court Grants Preliminary Injunction Against Department of Labor’s Overtime Rule

On November 22, 2016, the United States District Court for the Eastern District of Texas granted a motion to enjoin the United States Department of Labor (the “DOL”) from implementing and enforcing the DOL’s recently revised Final Rule that increases the minimum annual salary to qualify for the “white collar” exemptions. Plano Chamber of Commerce v. Perez, No. 16-cv-732 (E.D. Tex. November 22, 2016).

The Final Rule would have increased the minimum salary threshold required to qualify for the white collar exemption under the Fair Labor Standards Act (“FLSA”), from $23,660 ($455 per week) to $47,476 ($913 per week). The Final Rule also created an automatic updating mechanism in which the salary level would be updated every 3 years. For more information about the Final Rule, please see our alert dated May 18, 2016 at http://putneylaw.com/cu_051816.html. In granting a preliminary injunction, the Court found “that the Department’s salary level under the final rule and the automatic updating mechanism are without statutory authority.”

Despite this development in the FLSA, we remind New York employers that recent changes to the State Minimum Wage Order will become effective on December 31, 2016 for executive and administrative employees.

 

12/31/16

12/31/17

12/31/18

NYC Large Employers
(11 or more employees)

$825/week
($42,900 annually)

$975/week
($50,700 annually)

$1125/week
($58,500 annually)

NYC Small Employers
(10 or fewer employees)

$787.50/week ($40,950 annually)

$900/week
($46,800 annually)

$1012.50/week ($52,650 annually)

Nassau, Suffolk, and
Westchester
County Employers

$750/week
($39,000 annually)

$825/week
($42,900 annually)

$900/week
($46,800 annually)

Employers of All
Other Counties

$727.50/week ($37,830 annually)

$780/week
($40,560 annually)

$832/week
($43,264 annually)

If employers do not satisfy the applicable New York State salary threshold for exempt white collar workers, employers must ensure that the total weekly compensation for such workers equals or exceeds the minimum wage for all hours worked up to 40 hours worked in the workweek and at least 1 times the minimum wage for all hours worked in excess of 40 in the workweek.

Takeaway for Employers

Barring a reversal by a federal appellate court, the nationwide injunction bars implementation and enforcement of the Final Rule on the intended date. We will continue to provide updates in the event of any developments. Despite the preliminary injunction, New York employers should be mindful that on December 31, 2016, the salaries for their exempt executive and administrative employees meet New York’s minimum salary threshold. Please contact us with any questions.