Federal Judge Invalidates White Collar Overtime Rule

Regulation | October 05, 2017 | by

Updated September 6, 2017: As expected, a Federal judge in Texas struck down a final rule promulgated by the DOL under the Obama administration that nearly doubled the salary threshold for the Executive, Administrative, Professional, Outside Sales and Computer Employees (EAP) exemption under the Fair Labor Standards Act (FLSA). The move comes after the DOL under the Trump Administration signaled in a court filing this summer that it would no longer defend the rule.  

In the most recent action, the judge, an Obama appointee, found that the increase in the salary test from $23,660 to nearly $47,476 would dilute the "duties" test which focuses on the employee's dues, functions or tasks in determining whether the exemption applies. As such, the judge concluded that the rule inappropriately negated the structure devised by Congress in enacting the FLSA.

The rule was scheduled to take effect on December 1, 2016; however the same Federal judge in Texas issued a nationwide injunction on November 22, 2016 that initially blocked the rule. The Obama administration, in December, 2016, appealed the injunction to the U.S. Court of Appeals for the Fifth Circuit.  

LeadingAge, in 2015, filed a comment letter with the DOL that opposed such a steep increase in the salary threshold.