DOL Overtime Rule Struck Down

Sep 01, 2017

On August 31, 2017, Federal District Court Judge Amos Mazzant overturned the Fair Labor Standards Act (FLSA) Final Overtime Rule for so called "white collar exemptions" that would have doubled the annual salary level to qualify for exemption from overtime from $23,660 to $47,476. The same judge issued an injunction stopping implementation of the final rule nine months ago, and the Trump administration did not challenge the decision. The Obama Adminstration had supported the new rule as a means of raising wages for white collar workers and putting upward pressure on all wages that had been lagging behind. 

The proposed final rule had been broadly opposed by many employer organizations and 21 states who sued to block the rule. In granting summary judgment invalidating the overtime rule for plaintiffs in the lawsuit filed by several business groups and 21 states, Judge Mazzant stated, ““The Department has exceeded its authority and gone too far with the Final Rule,” he ruled. “Nothing in [FLSA] Section 213(a)(1) allows the Department to make salary rather than an employee’s duties determinative of whether a ‘bona fide executive, administrative, or professional capacity’ employee should be exempt from overtime pay.”

This may not be the end of the issue. Earlier, Labor Secretary Alex Acosta requested public comments on the rule and indicated that his department planned to review and possibly adjust the salary thresholds for exemption. The Department of Labor could also appeal the ruling.

For now, employers that have already made changes to their compensation plans can determine if they want to continue with the changes, suspend the changes, or roll back those changes pending new developments. These decisions should be made in accordance with any applicable state or local laws. 

Source:  ThinkHR,  Breaking News: Costly Overtime Rule Struck Down, Sept 1, 2017


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