A federal judge in Texas has granted a nationwide temporary injunction in response to a lawsuit filed by 21 states, including Ohio, to challenge the new Fair Labor Standards Act (FLSA) overtime rule. The court agreed with the plaintiff states that the new rule could cause irreparable harm if it was not stopped before it was scheduled to go into effect on December 1, 2016, saying that the Department of Labor (DOL) exceeded the authority it was delegated by Congress in issuing this overtime rule.

Under the new overtime rule, “white collar” salaried employees not otherwise exempt from overtime pay would be eligible for overtime pay if their weekly salary is less than $913, which equals $47,476 when calculated on an annual basis – doubling the previous salary threshold.

Although application of the new rules has been stayed, school districts should continue to track eligible employees’ hours and maintain meticulous payroll records. They should also require that employees submit time records.

Districts should be mindful that the new rule would affect only the salary threshold component of the overtime-exemption test – a two-part test that requires that employees meet the salary threshold as well as perform duties that are exempt under FLSA. Therefore, employees who meet the lower salary threshold ($23,660 annually) must also perform exempt duties for the overtime exemption to apply. Employees who perform nonexempt job duties are eligible for overtime regardless of their salary.

Ennis Britton attorneys are available to help with any questions regarding the overtime rule, the injunction, which employees are affected, how to maintain payroll records, and how the two-part salary–duties test applies.