Since 2015, the U.S. Department of Labor has been working to update the minimum wage and the "white collar" exemption under the Fair Labor Standards Act (FLSA). The effective new minimum salary level for the "white collar" exemption was to be raised as of December 1, 2016, from $23,660.00 per annum to $47,892.00 per annum, in what has been called the Overtime Final Rule. This left those employees who did not meet the minimum salary threshold as potentially qualifying for overtime pay. While employers frantically evaluated how these changes would affect their bottom line, a federal district judge in Texas granted a nationwide emergency preliminary injunction that prohibited the U.S. Department of Labor from enforcing the Overtime Final Rule. The case went up to the Fifth Circuit Court of Appeals, where in 2016 a stay was put in place while the U.S. Department of Labor considered formulating a new rule.
The Fair Labor Standards Act (FLSA) guarantees eligible employees a minimum wage and overtime pay for hours worked in excess of 40 in a work week. However, there are a number of exemptions to that guarantee. The "white collar" exemption contained in 29 C.F.R. 541 is based in part on a minimum salary level, with those exceeding it potentially being exempted from FLSA overtime protection. More than a decade has passed without any change in the minimum salary level, while at the same time the federal minimum wage has increased. This has resulted in certain low-paid salaried employees finding themselves without overtime protection. In March 2014, President Obama directed the U.S. Department of Labor to update FLSA regulations, and in particular the "white collar" exemption, in order to modernize and simplify the regulations while maintaining the FLSA's intended overtime protections.