When will the new salary level rule go into effect?

Ever since a Texas district court temporarily enjoined the Department of Labor’s (DOL) new salary level/overtime pay rule from going into effect Dec. 1, 2016, many have been asking if and when those rules will become effective. 

By way of background, the DOL adopted a new rule which sought to update only the salary level required for employers to qualify employees for exemption from the minimum wage and overtime rules while leaving the other exemptions requirements unchanged.

The new rule moved the salary level from $23,400 to $47,476 per year. Several state attorneys general filed an injunction to stop implementation of the new rule. On Nov. 22, 2016, a federal court granted a preliminary injunction to stop the rule from going into effect.

The DOL has filed an appeal of the preliminary injunction to the Fifth Circuit Court of Appeals. The DOL strongly disagrees with the decision of the District Court stating, “[t]he Department’s Overtime Final Rule is the result of a comprehensive, inclusive rule-making process, and we remain confident in the legality of all aspects of the rule.”

The Fifth Circuit Court of Appeals granted the DOL’s motion for expedited briefing and oral argument. Briefs are due Jan. 31, 2017, with oral argument to follow. It is expected that the Fifth Circuit will act quickly once those oral arguments have taken place.

Employers should prepare for quick implementation of the rule in the event the Fifth Circuit does not uphold the preliminary injunction. That said, President-elect Trump’s nominee to head the DOL is expected to undertake efforts to undo the rule if it becomes effective after the appeal process. Stay tuned — there are likely to be lots of changes impacting employers in 2017.