On November 22, 2016, U.S. District Judge Amos L. Mazzant granted a nationwide preliminary injunction in favor of the 21 states and more than 50 business groups that sued to enjoin the new Fair Labor and Standards Act (“FLSA”) overtime rule that would increase the minimum salary level for exempt employees from $455 per week ($23,660 annually) to $921 per week ($47,982 annually). The new rule, issued under an executive order of the President, had an effective date of December 1, 2016 and would have required employers to pay overtime to employees who worked more 40 hours per week and were salaried at less than $921 per week or $47,982 annually. Those rules will not go into effect because of this order.
The Court found that the Plaintiffs’ stood a significant chance of success on the merits and would suffer irreparable financial harm if the rule was put into effect as scheduled on Dec. 1, 2016. The Court granted the injunction across the country because the scope of the alleged injury extends nationwide. The judgment stops enforcement of the new overtime rules until and unless the government is successful with an appeal from the Fifth Circuit Court of Appeals.
The rules apply to “white collar” exempt employees, which includes workers that perform administrative, executive or professional duties. CPAs, EAs and other tax return preparers are directly affected by this rule. Many of those employers hire exempt employees on weekly salaries for administrative and professional purposes during the tax filing season. Before the injunction, those seasonal tax workers would have been eligible for overtime unless their weekly salary was in excess of $921/week. Unless the government is successful with an appeal, those rules will not go into effect for the upcoming tax season.
Read the full opinion here: Nevada v. United States Department of Labor, Docket No. 00731