Update Alert: Judge Blocks Minimum Salary Changes for Exempt Employees

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Major changes to the minimum salary requirements for exempt employees originally scheduled to take effect on December 1, 2016, are now on hold as the result of a ruling by a U.S. District Court judge in Texas.

As discussed in our November 7, 2016 blog post, the new rules would significantly increase the minimum salary requirements for the executive, professional and administrative employee exemptions (from $455/week to $913/week) and the minimum compensation for the highly compensated employee exemption (from $100,000/year to $134,004/year).

Twenty states joined together to challenge the new rules. On November 22, 2016, Judge Amos L. Mazzant III of the Eastern District of Texas issued a preliminary injunction blocking the new rules from taking effect. Since it is only a preliminary injunction, the judge can change his ruling after further proceedings, but that is seen as unlikely. The Obama Administration can appeal the ruling to the Fifth Circuit Court of Appeals, if it chooses to do so, but no decision has been announced.

The ruling means employers do not have to make any changes to current salary levels, at least until the courts make a final decision. Most employers already planned for the new rules, so it will be interesting to see how employees react when employers rescind their announced changes. We also don’t know the Trump Administration’s position on the proposed changes, so stay tuned.