Federal Judge Strikes Down Obama Overtime Rule

A federal judge has struck down an Obama administration rule that would have extended overtime eligibility to more than 4 million white collar workers. As discussed in our prior post, the new rule would have dramatically narrowed the “executive, administrative, and professional” (“EAP”) exemption, increasing the salary threshold from $455 to $913 per week. On Thursday, August 31, 2017, however, U.S. District Judge Amos Mazzant (an Obama appointee) invalidated the new rule. This follows Judge Mazzant’s November 2016 decision to grant an emergency motion for preliminary injunction blocking the new rule from going into effect.

In his August 31 decision, Judge Mazzant concluded that the Department of Labor improperly emphasized wages paid over duties performed, when Congress intended the EAP exemption to cover employees who performed certain duties. Mazzant explained:

• “Congress defined the EAP exemption with regard to duties. In other words, Congress unambiguously intended the exemption to apply to employees who perform ‘bona fide executive, administrative, or professional capacity’ duties.” Memo. Op’n. at 12.
• “The Department of Labor does not have the authority to use a salary-level test that will effectively eliminate the duties test as prescribed by Section 213(a)(1). Nor does the Department have the authority to categorically exclude those who perform ‘bona fide executive, administrative, or professional capacity’ duties based on salary level alone.” Memo. Op’n. at 14.

From here, backers of the overtime rule will likely appeal. The Department of Labor – now that it’s under a new administration – may issue an alternative proposed rule with a smaller increase of the salary threshold. In the meantime, however, the old test for the EAP exemption stands.

If you have questions specific to your business, contact your Klein Bussell attorney for compliance advice and support.

*Photo Credit: renjith krishnan via FreeDigitalPhotos.com

The information contained on this blog is not legal advice, nor does this blog create an attorney-client relationship. Klein Bussell attorneys do not blog about pending matters handled on behalf of our clients and will never disclose client confidences.