
We have previously posted on the
DOL’s 2016 overtime rule, the injunction issued by the federal district court
in Texas last fall, and the status of the appeal. (See http://www.themodernworkplace.com/2016/05/the-dol-final-rule-finally.html; http://www.themodernworkplace.com/2016/11/federal-court-issues-nationwide.html;
and http://www.themodernworkplace.com/2017/04/what-happened-to-new-federal-overtime.html).
As a quick refresher, in issuing an injunction against the overtime rule last
fall, the Texas federal district court questioned whether the DOL has the
authority to set an exempt employee salary test. Of particular note was the district
court’s statement that, in the FLSA, “Congress defined the EAP [executive,
administrative, and professional] exemption with regard to duties, which does
not include a minimum salary level.”
Many had anticipated that the Trump
administration would scrap the Obama-era overtime time rule altogether. The
actions by the DOL make clear that this is not going to happen, although a
scale back is still possible. In recent testimony, the DOL Secretary stated
that he might support raising the salary threshold in a modest amount to
account for inflation.
So what happens now? Here are the
possibilities:
- If the Fifth Circuit confirms that the DOL has the authority to set an exempt salary level requirement and lifts the injunction, the rule as currently written (with the $913 weekly salary amount) would not likely become effective until the DOL revises the rule.
- If the Fifth Circuit confirms that the DOL has the authority to set a salary level requirement but leaves the injunction in place, the DOL will most likely have time to update the rule, giving employers time to comply with the new requirements.
- If the Fifth Circuit affirms the lower court ruling and concludes that the DOL does not have statutory authority to require a minimum exempt employee salary, the status of the new rule will be uncertain. The DOL may choose to appeal to the U.S. Supreme Court, which would mean that the uncertainty about the rule would continue for some time.
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