|Thank you to our good friend and colleague, Matt the Lawyer, for the following article with updates on the Fair Labor Standards Act:
White Collar Overtime Rule Finally Dead?
The White Collar Overtime Rule is dead--probably. At the end of last year, I scared every small business owner I know or represent with the Department of Labor's massive change to the Executive, Administrative, and Professional (EAP) overtime exemption. Hopefully, unlike the Night King in Game of Thrones, it will not come back from the dead.
The U.S. Department of Labor issued a final rule in May 2016 seeking to increase the minimum salary for executive, administrative, or professional workers from $23,600 per year, to nearly $50,000 per year. The proposed change
would have likely cost workers jobs while adding to the financial burden of small business owners all over the country, particularly those in states where the average salary is much lower. A group of states and business organizations filed suit in Texas. In November 2016, just before the new rules were to take effect, a federal judge put the rule on hold with a preliminary injunction. Late last week, Judge Amos Mazzant issued a permanent injunction, barring implementation of the rule nationwide. If you want a legal dissection of the decision, this report
is probably the best around. The gist of the ruling is that the DOL did not have the authority to issue the rule as it was written. There is an appeal of the November 2016 order pending, which is currently scheduled to be heard early next month.
The practical effect of this ruling and election of President Trump is that the overtime rule as published in May 2016 is likely--but not certainly--dead. A change to the overtime rule is coming. The facts behind the rule have not changed; the salary level for EAP exemption is laughably low and has not been updated in 13 years. A change is coming, but it will not be the drastic change the Obama Administration sought. In all likelihood, the Trump Administration will seek a much more tolerable increase in the salary level to the mid-$30,000 range.