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Legal Update - Increased Salary Threshold for Exempt Status Pursuant to the Fair Labor Standards Act Placed on Hold by Federal Court
NOVEMBER 28, 2016 | Windels Marx - Employment & Employee Benefits Legal Update

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On November 22, 2016, a federal court issued a preliminary injunction temporarily putting on hold implementation of the Department of Labor’s recent increase in the minimum annual salary requirements for an employee to be considered exempt from overtime under the Fair Labor Standards Act ("FLSA").

As referenced in our June 2016 Legal Update, the new salary threshold was set to go into effect on December 1, 2016. Numerous states challenged the law and, yesterday, a federal judge ruled that the Department of Labor’s salary level and automatic updating mechanism are without statutory authority. The Court determined that the Department does not have the authority to use a salary-level test or automatic updating mechanism in combination with the existing duties test when determining eligibility for exemption from the FLSA.

The Department of Labor has stated its intention to appeal the ruling, which could reinstate the modification. For now, however, the existing salary threshold of $455 per week ($23,660 annually) will not change.


Please do not hesitate to contact Scott R. Matthews at (212) 237-1025, or, with any questions or comments.


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