Replace: Will The DOL’s New Exempt Worker Guidelines Be Delayed?

UPDATE NOVEMBER 15, 2024 – The DOL’s New Exempt Worker Guidelines Have been Vacated in its Fully

On November 15, 2024, District Judge Sean D. Jordan issued an order vacating and setting apart the DOL’s April 2024 guidelines that elevated the wage thresholds for exempt staff on July 1, 2024, January 1, 2025, and sooner or later.

In making his resolution, District Choose Jordan concluded that the DOL’s rule change exceeded its authority by successfully changing the FLSA’s exempt worker checks with a salary-only take a look at. In vacating the DOL’s guidelines, District Choose Jordan decided {that a} preliminary injunction wouldn’t be acceptable as a result of the rule impacted thousands and thousands of staff, employers and governments and it might not be sensible to vogue party-tailored reduction.

UPDATE NOVEMBER 11, 2024 – A Listening to Discussing the Numerous Motions Associated to the New DOL Guidelines

November 8 Listening to

We’re getting a bit nearer to know whether or not employers shall be required to extend exempt worker’s salaries on January 1, 2025.

On November 8, 2024, District Judge Sean D. Jordan held a hearing relating to whether or not he’ll grant or deny the motions by the assorted events in search of a brief order blocking enforcement of the DOL’s April 2024 new rules growing the wage thresholds for exempt staff. The expectation is that District Choose Sean D. Jordan will situation his resolution by the top of the 12 months, however hopefully sooner.

Will the Election Outcomes Affect the DOL’s New Guidelines?

Along with the uncertainty as we look ahead to District Choose Jordan resolution, there’s extra uncertainty with the election of Donald Trump. It’s typical for a brand new president, particularly one which comes from a special political occasion, to have completely different agendas that the prior president.

When President Trump appoints a brand new Secretary of Labor, the President and the brand new Secretary could abandon try to contest authorized claims difficult the April 2024 exempt worker wage threshold adjustments, search methods to overturn the brand new guidelines, or search some solution to mitigate it’s affect on employers.

UPDATE SEPTEMBER 24, 2024 – A Fifth Circuit Determination and Extra Motions

The Fifth Circuit Reaffirms that Wage Thresholds for Exempt Staff are Permitted underneath the FLSA

Again in 2019, the FLSA elevated the wage threshold for exempt staff from $455 per week to $684. In response to the rise, Robert Mayfield and R.U.M. Enterprises filed a lawsuit arguing that the FLSA, as drafted and enacted by Congress, didn’t allow the US Division of Labor to set any wage thresholds for exempt staff when deciphering and implementing the FLSA.

On September 24, 2024, the Fifth Circuit joined four other circuits rejecting the argument that the US DOL couldn’t set up wage thresholds. Amongst different causes, the Fifth Circuit decided that 1) the DOL has set wage thresholds for over eight years and a couple of) the DOL, when figuring out which staff meets the FLSA’s exempt employee tests, my embrace a wage threshold as a proxy of eligibility at the least in a part of the overall exempt checks.

You will need to observe that this resolution doesn’t essentially spell doom for the events difficult the DOL’s most up-to-date guidelines. The query the events are nonetheless litigating is basically whether or not the DOL’s most up-to-date rule growing wage thresholds shouldn’t be counting on wage as a proxy, however as an alternative is successfully changing the FLSA’s exempt worker checks with a wage take a look at. The Firth Circuit didn’t deal with this situation within the Mayfield v. Department of Labor resolution.

As famous beforehand, District Choose Sean D. Jordan has already granted the State of Texas’ motion to briefly keep the brand new guidelines for workers of the State of Texas. In doing, Choose Jordon concluded that the DOL’s latest guidelines possible violates the FLSA as a result of it’s successfully changing the exempt worker take a look at with a wage take a look at. He decided that the DOL’s new guidelines would exclude from exempt standing many staff who in truth meet the FLSA’s exempt worker checks, an consequence that’s opposite to the language of the FLSA. Furthermore, though his prior resolution predated the Firth Circuit’s Mayfield v. Division of Labor resolution, Choose Jordon was conscious {that a} wage threshold was permitted underneath the FLSA underneath Wirtz v. Mississippi Publishers Corp., 364 F.2d 603 (5th Cir. 1966)

The Events Proceed to File Motions

As typical for this stage of the method, the parties are continuing to file motions supporting and difficult one another’s arguments. As quickly because the movement course of has ended, it’s possible Choose Jordan will maintain a listening to, after which he’ll situation his resolution relating to whether or not he’ll situation a brief order or now.

To remain on prime of the progress with motions and listening to, we suggest that you just additionally go to the Court Listener who tracks and makes public all motion relating to this situation in actual time.

UPDATE AUGUST 27, 2024 – Extra States Be a part of Texas in Difficult the New DOL Guidelines

There may be nonetheless uncertainty whether or not the US Division of Labor’s new exempt worker wage thresholds guidelines will survive the authorized challenges. Nevertheless, there was some significant motion that will get us nearer to the reply.

Japanese District of Texas lawsuits have been consolidated

Two circumstances have been filed within the Japanese District of Texas difficult the DOL’s new guidelines.

• One case, as mentioned within the prior replace, concerned the state of Texas.
• The other case concerned the next companies and organizations: Texas Restaurant Affiliation; Nationwide Affiliation of Wholesaler-Distributors; American Lodge and Lodging Affiliation; Plano Chamber of Commerce; Dase Blinds; Nationwide Affiliation of Dwelling Builders; Related Builders and Contractors; Nationwide Retail Federation, Cooper Common Contractors; Nationwide Federation of Unbiased Enterprise, Inc.; Worldwide Franchise Affiliation; Restaurant Legislation Heart; and Nationwide Affiliation of Comfort Shops.

On June 28, 2024, the Japanese District of Texas consolidated both cases to “keep away from pointless value or delay, and since the above-captioned circumstances share widespread questions of legislation or reality.”

What makes this consolidation necessary shouldn’t be a lot that it occurred however to which decide the consolidated circumstances have been assigned. They have been assigned to District Choose Sean D. Jordan, and Choose Jordan already granted the State of Texas’ motion to briefly keep the brand new guidelines.

Abstract judgment motions have been filed

On July 18, 2024, the companies and organizations difficult the DOL’s new guidelines filed their Motion for Summary Judgment and on July 25, 2024, the State of Texas filed its Motion for Summary Judgment. The aim of this movement is to provide the Choose a chance to find out, primarily based on the information supplied by the events, whether or not the DOL’s new guidelines are opposite to the restrictions of the Truthful Labor Requirements Act as a matter of legislation.

On August 8, 2024, the US Division of Labor filed its personal Motion for Summary Judgment and its opposition to the abstract judgment motions of the opposing events.

Either side will now be given a chance to answer the opposite sides abstract judgment motions. It’s unsure how lengthy it’s going to take for the events to file their responses as a result of it’s common for events to request extensions time to file.

Many states have joined Texas difficult the brand new guidelines

On August 6, 2024, Choose Jordan granted the following states the ability to file a joint brief difficult the DOL’s new guidelines:

The affect of the Supreme Courtroom’s Loper case

On June 28, 2024, the US Supreme Courtroom issued Loper Bright Enterprises v. Raimondo. On this case, the Supreme Courtroom overturned its prior Chevron USA v. NRDC resolution that granted federal companies some authorized safety from challenges to its interpretations of legal guidelines. With out this prior deference and safety, it’s cheap to imagine that the DOL’s arguments in favor of the brand new guidelines will carry much less weight with Choose Jordan than earlier than.

UPDATE JULY 1, 2024 – Uncertainty Persists

On June 28, 2024, Choose Sean D. Jordan of the US District Courtroom for the Japanese District of Texas delayed implication of the US Department of Labor’s new exempt employee rules BUT just for staff of the State of Texas. According to the judge:

In sum, Texas has established that every one elements weigh in favor of granting a preliminary injunction,” Jordan wrote. “Texas is probably going to reach exhibiting that the 2024 Rule is an illegal train of energy, Texas shall be irreparably harmed absent an injunction, and the stability of equities and the general public curiosity favor stopping illegal company motion.

As famous, though the decide delayed the brand new exempt worker guidelines, the delay applies completely to the State of Texas as an employer. In different phrases, solely the State of Texas, as an employer, is permitted to disregard the brand new DOL guidelines. This doesn’t apply to every other employers in Texas or every other state, who should adjust to the principles.

For everybody besides staff of the State of Texas, the brand new guidelines grew to become impact on July 1, 2024. Nevertheless, there are nonetheless a number of lawsuits pending difficult the brand new guidelines that also may end in a nationwide delay. Having a federal court docket already figuring out the principles are illegal ought to carry some weight within the different pending lawsuits; nonetheless, different federal district courts aren’t sure by the conclusions of Choose Jordan, and thus, they may uphold the DOL’s new guidelines. Thus, for everybody besides staff of the State of Texas, the uncertainty continues.

UPDATE JUNE 24, 2024

According to the ABA Banking Journal, on June 24, 2024:

“A federal court docket in Texas immediately held a listening to to think about requests by enterprise teams and Texas Lawyer Common Ken Paxton for a brief restraining order to cease the Division of Labor’s additional time remaining rule from taking impact on July 1.”

This listening to includes Texas v. U.S. Department of Labor, that was filed on June 3, 2024, within the U.S. District Courtroom in Japanese Texas. In line with JD Supra:

“Texas requested the court docket to put aside the minimal wage ranges within the 2024 rules as a result of, like the degrees within the 2016 rules, they ‘would exclude so many staff who carry out exempt duties, [that they fail] to hold out Congress’s unambiguous intent.’”