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The New Overtime Rule has Been Blocked - Now What?

Labor and Employment e-Alert
November 23, 2016

Yesterday, a federal district court in Texas issued a temporary injunction against implementation of the new overtime rule that raised the salary level threshold. The court made a preliminary ruling that the U.S. Department of Labor did not have authority to increase the minimum salary level – from $23,600 to $47,892 – for those employees who are classified under the executive, administrative, and professional exemption, otherwise known as the "white collar" exemption. The injunction applies nationwide.

The new salary requirement was supposed to take effect on December 1, 2016. Given the nature of the case, it is likely that the federal court will eventually enter a permanent injunction. Moreover, given the timing of the decision, and the upcoming change in Administration, it is possible that the district court's ruling will not be challenged, and that the new rule will be withdrawn.

At this point, employers have two choices: (1) continue with your efforts to comply with the new rule; or (2) delay implementation of any changes to your classification and compensation structures pending the outcome of the litigation. The decision to delay implementation will largely depend on business considerations and employee morale.

For employers in West Virginia, if you have already implemented new classification and salary structures, and you have already advised your employees of these changes, you may need to maintain the new classification and compensation arrangement for at least one pay period. The West Virginia Wage Payment & Collection Act requires employers to provide employees with written notice of any change in rate and method of payment. This notice must be provided at least one (1) full pay period prior to the effective date of the change.