Temporary Injunction Granted

Article by: Christine Nentwig

Late yesterday we learned that a federal court judge in Texas issued a preliminary injunction that temporarily blocks implementation and enforcement of the Department of Labor’s (DOL) revised overtime regulations, which more than doubled the salary threshold for white collar exemptions and were set to take effect December 1, 2016.

This is a welcome reprieve for employers struggling with implementing any necessary changes, but may present complications for those who have already set the wheels of compliance in motion.  First, it is important to remember that the injunction is temporary – not permanent – and so the rule may still go into effect at some time in the future in its current or some revised form.  So employers who have not yet made changes should consider continuing to track hours for affected employees and plan for compliance should the regulations ultimately take effect. This tracking is also important as there is a slight risk that if the regulations are ultimately upheld, they could be enforced retroactively, meaning employers would be required to have the records necessary to calculate any overtime or wages owed.  For employers who have already made salary changes or modified employees’ exempt status, bear in mind that in Pennsylvania, any pay changes must be communicated to employees on or before the payday prior to any such change taking effect. Therefore, if employers have implemented pay changes, before reverting to the prior compensation structure, be sure to provide  the necessary notice before making any such change. 
 
Of course, we will continue to closely monitor the situation and will update you with further developments as they occur.  In the meantime, have a very Happy Thanksgiving and please do not hesitate to contact us with any questions.