• DOL Exempt Employee Salary Rule Invalidated by Judge
  • October 5, 2017
  • The latest development in the controversy surrounding the Final Rule, issued by the Department of Labor (DOL) that changed the salary threshold concerning which workers are eligible for overtime, is a final judgement that invalidates the rule entirely.

    The Final Rule was one of the last major actions of the Obama administration and raised the salary threshold for exemption from overtime pay from $23,660 to $47,476. Before the changes could go into effect on December 1, 2016, a lawsuit filed in a Texas federal district court won a preliminary injunction against the rule, effectively blocking it. The case known now as Nevada v. U.S. Department of Labor began as two separate lawsuits. In both cases, the plaintiffs argued that the DOL had overstepped its authority by doubling the threshold of the salary test, thereby giving it too much weight and detracting from the value of the Fair Labor Standards Act (FLSA) duties test.

    Judge Amos Mazzant combined the two lawsuits into one and granted the preliminary injunction. The DOL appealed his decision on December 1, 2016. Because of the election, everything was essentially on hold during the changeover in administrations. Employers and employees waited in limbo to see how the Trump administration would proceed with the issue.

    On August 31, 2017, Judge Mazzant issued a final Opinion and Order in the case granting summary judgement to the plaintiffs. He declared the Rule invalid and unenforceable, stating that we would not be where we are today if the salary level had been adjusted for inflation rather than doubled by the DOL Rule. He agreed that certain salary tests are appropriate, but found that Congress was unambiguous in creating overtime exemptions based on duties and not specific salary levels.

    Despite the final judgement by Mazzant, the status of the case is still in question because of the active appeal of his first injunction. The DOL has the option to appeal this ruling, but it is more likely that it will revise the rule and come up with its own update of the salary test. Last year when the Final Rule was first announced, some employers went ahead and raised managers salaries in order to avoid paying them overtime, starting December 1. Other companies waited to take action and it seems they will continue to wait for complete clarity on the issue of overtime.

    Philadelphia Employment Lawyers for Fair Labor Standards Act at Sidkoff, Pincus & Green P.C. Provide Counsel on Wage and Hour Disputes
    With all the current uncertainty about overtime pay, you may wonder if you are being paid fairly. The Philadelphia wage dispute lawyers at Sidkoff, Pincus & Green P.C. offer counsel for all of your legal employment needs. Call 215-574-0600 today to schedule a consultation about your case, or contact us online. From our offices in Philadelphia, we serve clients locally and throughout Pennsylvania and New Jersey.