U.S. District Court Enjoins Implementation of EAP Overtime Exemption Rule

Last week, a federal district court in Texas enjoined the implementation of new U.S. Department of Labor regulations that raise the minimum compensation level for employees to be classified as exempt from federal overtime requirements. The new executive, administrative, and professional (EAP) threshold had been scheduled to take effect on Dec. 1, 2016. The court held that its injunction applies nationwide. However, according to our attorneys at Hinman Straub, New York employers should be aware that failure to comply with the new rule could expose them to liability through private litigation, if the court’s decision were to be reversed on appeal. The future of the EAP exemption threshold is further complicated by the prospect of a new administration in Washington that may revisit the rule.

It is important for New York employers to recognize that New York State has proposed its own regulations to raise the current EAP of $675 weekly in a series of annual increments, based on region and the size of the employer, beginning on Dec. 31, 2016. These regulations are still in the public comment phase and have not been adopted.

For a detailed summary of the decision and its implications, as well as the New York State regulations, please review this memorandum from Hinman Straub.

Contact: Karen Lipson, klipson@leadingageny.org, 518-867-8383 ext. 124