Proposed Final Overtime Pay Rule Invalidated

Proposed Final Overtime Pay Rule Invalidated

September 6, 2017

On August 31, 2017, a Untied States District Court Judge for the Eastern District of Texas granted Summary Judgment for the plaintiffs and thereby invalidated the final overtime rule.  The lawsuit was initially brought by 21 states and several business groups.  The rule, which would have more than doubled the salary level for overtime exemptions from $23,660.00 to $47,478.00, regardless of whether employee would qualify for the overtime exemption under the executive, administrative or professional duties test, had been prevented from taking effect for nearly nine months as a result of a nationwide injunction that was ordered on November 22, 2016.

In granting the summary judgment motion, the Court held, in part, that: “The Department of Labor had exceeded its authority and gone too far with the Final Rule.  Nothing in Section 213(a)(1) [of the FLSA] allows the Department to make salary rather than employee’s duties determinative of whether a bona fide executive, administrative, or professional capacity employee should be exempt from overtime pay.”  The Court’s opinion can be read in its entirety here.

It remains to be seen whether the U.S. Department of Labor will appeal the ruling.  Paine Hamblen clients are always welcome to check with us to learn more about this matter, as well as the multitude of wage and hour regulations that impact you and your organization.

By:  Dale A. De Felice