The higher salary requirements under the Fair Labor Standards Act (FLSA) white collar exemptions that were set to take effect December 1, 2016, have been ruled invalid by a U.S. District Court in Texas. The same court preliminarily enjoined the implementation of these regulations on November 22, 2016. That decision is presently on appeal to the Fifth Circuit Court of Appeals. Although the U.S. Department of Labor (DOL) requested that the district court delay its final decision on the merits of the case until after the court of appeals rules on the preliminary injunction, the district court declined to do so and issued its final decision on August 31, 2017.

As previously reported, the Fifth Circuit Court of Appeals is currently reviewing a challenge to the recent Fair Labor Standards Act ("FLSA") overtime changes. Previously, a Texas district court entered an injunction preventing the Department of Labor ("DOL") from implementing new regulations regarding the determination of who is exempt for overtime purposes. On June 30, the DOL filed its reply brief with the Court of Appeals, stating that although it was no longer defending the overtime rule set to become effective on Dec. 1, 2016, it believed the district court erred in concluding that the DOL had no authority to set white-collar salary limitations. Therefore, the DOL requested that the court rule in its favor on that issue and reject the district court’s issuance of the injunction, which, it argued, “would call into question any salary-level test adopted by the [DOL].”  

Just eight days before the Dec. 1, 2016, effective date, the United States District Court for the Eastern District of Texas entered a nationwide injunction prohibiting the U.S. Department of Labor from enforcing the recent regulatory changes issued pursuant to the Fair Labor Standards Act (FLSA). The DOL had previously published a proposed Notice of Rulemaking and, thereafter, a Final Rule which, as of Dec. 1, would have raised the minimum salary level for exempt employees from $455 per week ($23,660 annually) to $913 per week ($47,476 annually).  In addition, the Final Rule would have established an automatic updating mechanism that would have adjusted the minimum salary level every three years; the first automatic increase was scheduled to occur on Jan. 1, 2020.