CLIENT ALERT – OVERTIME LITIGATION UPDATE

December 2, 2016

For anyone thinking that the injunction entered by a Texas federal court would end the change to the overtime regulations, think again.  The matter has been appealed to the U.S. Circuit Court of Appeals for the Fifth Circuit.

In broad terms, one of the issues in the case is the authority of the Department of Labor to set the salary level requirement for exempt employees.  Interestingly, the Texas federal court stated (in a footnote) that it was “not making a general statement on the lawfulness of the salary-level test” for executive, administrative and professional (EAP) employees.  Rather, it found the Department of Labor exceeded its authority when it increased the salary level this time. Thus, it’s not surprising that in explaining the decision to appeal, the Department of Labor issued a short statement noting, in part, that under the broad authority granted the Secretary of Labor, it has updated the exempt employee salary level seven times since 1938.

Does the appeal affect employers?  At least for the time being, the appeal has no effect on the injunction.  Our most recent advice remains unchanged.  Employers can maintain the pre-December 1 status quo.  We’ll keep you posted on any legal additional developments affecting implementation of the new regulation.

Contact me with your questions.

Jean Novak is co-chair of the Employer-Employee Relations Practice Group and member of the Business Services and Public and Non-Profit Practice Groups. She can be reached at 412-281-5423 or at jnovak@smgglaw.com.