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Great News For Businesses: Federal Judge Strikes Down Department Of Labor Overtime Rule!

A Federal Judge invalidated the $47,476 salary threshold that the U.S. DOL attempted to implement last year. A Texas Judge who last year temporarily enjoined the D.O.L. from implementing its highly controversial overtime regulations in December, as planned, has issued a final decision declaring them invalid and unenforceable. District Court Judge Amos L. Mazzant, III ruled that the Obama D.O.L. exceeded its authority when it more than doubled the minimum salary level for white collar overtime exemptions. The ruling impacts millions of employees and their employers.

The U.S District Court Judge stated that when the U.S. DOL increased the salary level portion of the "white collar" or "EAP" test, it violated its authority because Congress "unambiguously directed the Department to exempt from overtime pay employees who perform 'bona fide executive, administrative, or professional capacity' duties." And when the U.S. DOL made the dramatic increase, the salary portion of the test became the main focus of the overtime exemption, which is not how Congress implemented the law. Now this doesn't mean that the U.S. DOL can't increase the salary level, just not to the dramatic level of $47,476. So it will be interesting to see what salary the new U.S. DOL will choose, when it implements its changes.

This final decision preserves the existing minimum salary of $455 per week ($23,660 per year) for exempt status from overtime pay. Although the decision can be appealed to a higher court, it may be unlikely since the D.O.L. has a new Labor Secretary, Alexander Acosta, appointed by President Trump. Mr. Acosta already is in the process of developing new regulations that are likely to differ substantially from those issued under the previous administration.

Want input on redrafting the DOL overtime Rules? Here is your chance!

Submit comments to us by email no later than 09/15/2017 in order to make the Labor Secretary's deadline. Our lawyers will advocate on behalf of our clients and friends from virtually every industry and state, to influence the final regulation in favor of employer's interests.

Questions? Contact attorney Jim Sherman in our Minnesota office at (952) 746-1700 or by email at [email protected]

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