DOL OT Rule Invalidated

On August 31, 2017, U.S. District Judge Amos Mazzant granted summary judgment to business groups challenging the Obama administration’s rule which greatly broadened federal overtime pay protection, saying that the Department of Labor (DOL) had used a salary-level test that was too high and would effectively supplant the duties test.

The rule raised the minimum salary threshold to qualify for the Fair Labor Standards Act (FLSA) “white collar” exemption to just over $47,000 per year, double the previous threshold set in 2004; the rule also increased the overtime eligibility threshold for highly compensated workers format least $100,000 to at least $134,000 a year.

Last year, Judge Mazzant issued a preliminary injunction blocking the rule days before it was to go into effect. The Trump administration’s DOL had asked the Fifth Circuit to overturn Judge Mazzant’s finding that it lacks the authority to set a salary test, even though it will not reinstate the Obama administration’s salary level; but today the DOL told the court it is withdrawing its appeal.

With the invalidation of the 2016 rule, the 2004 salary threshold is back in place. However, the DOL has already published a Request for Information (RFI) seeking public feedback on revisions to overtime regulations. As the rulemaking process continues, there is the potential for salary levels to be raised, although not likely as high as the level set by the Obama administration. The comment period for all issues raised in the RFI ends on September 25, 2017.