You probably thought the rule was dead already but Texas Federal District Court Judge Amos Mazzant just made it official by declaring that the Obama administration’s long-delayed increase in the overtime exemption threshold is illegal and may not be implemented.
Too Much Focus on Salary
The ruling came in a lawsuit filed by the Plano (Texas) Chamber of Commerce (and joined by dozens of other business groups) challenging the proposed increase to the minimum salary necessary to be considered exempt from overtime under the Executive, Administrative and Professional exemptions of the Fair Labor Standards (collectively known by the euphemism “white collar exemptions”). The proposal required that workers could not be considered exempt from overtime pay unless they received a salary of at least $913.00 per week ($47,476 annually).
The Judge wrote:
“The department has exceeded its authority and gone too far with the final rule…[t]he department creates a final rule that makes overtime status depend predominately on a minimum salary level, thereby supplanting an analysis of an employee’s job duties. Because the final rule would exclude so many employees who perform exempt duties, the department fails to carry out Congress’s unambiguous intent.”
Bottom Line
This proposed increase has been on life support anyway since the Trump administration appeared to have no interest in enforcing it and almost certainly will decline to appeal this ruling. Instead, as we wrote earlier in our piece entitled “Here We Go Again! DOL Seeks Public Comment on Revising Overtime Rules“, the Department of Labor now seems less interested in the salary issue and more focused on the duties that an employee must perform in order to be deemed exempt. Still, there may be some labor groups who will try to take this to the appellate courts.
This has been a true regulatory roller coaster and we are reluctant to declare it over for good. Still, it is a very good bet that this huge increase in the salary requirement for overtime exemption is headed for the dust bin of history.