A federal court in Texas on Friday issued a preliminary injunction partially blocking the Department of Labor’s overtime final rule. The state of Texas had filed a lawsuit challenging the rule, and the court blocked enforcement of the rule against Texas (as an employer) only. A group of nonfinancial employer-side trade associations had filed a separate lawsuit. The court did not rule on that lawsuit, which had not sought a preliminary injunction to enjoin the July 1 salary increase. Consequently, unless there is further judicial action, the rule takes effect today with respect to all private employers, including banks.
The rule increases the salary level below which an employee is automatically subject to the Fair Labor Standards Act’s overtime and minimum wage requirements. As of July 1, the existing $35,568 salary level increased to $43,888. Therefore, if a bank has exempt employees who make between $35,568 and $43,888, the bank will need to reclassify the employee as nonexempt—and therefore subject to federal overtime and minimum wage requirements—or increase the employee’s salary to $43,888.
Previously, the American Bankers Association joined other trade associations in urging the DOL to extend the July 1 implementation date to at least Sept. 1. They also urged the DOL to stay implementation of the rule to allow for judicial review. The agency has not responded to the requests.
