On August 31, 2017, Federal District Court Judge Amos Mazzant overturned the Fair Labor Standards Act (FLSA) Final Overtime Rule that would have doubled the annual salary level to qualify for exemption from overtime from $23,660 to $47,476. The same judge issued an injunction stopping implementation of the final rule nine months ago, and the Trump administration did not challenge the decision.
In granting summary judgment invalidating the overtime rule for plaintiffs in a lawsuit filed by several business groups and 21 states, Judge Mazzant stated, â€œâ€œThe Department has exceeded its authority and gone too far with the Final Rule,â€ he ruled. â€œNothing in [FLSA] Section 213(a)(1) allows the Department to make salary rather than an employeeâ€™s duties determinative of whether a â€˜bona fide executive, administrative, or professional capacityâ€™ employee should be exempt from overtime pay.â€
This may not be the end of the issue. Earlier, Labor Secretary Alex Acosta requested public comments on the rule and indicated that his department planned to review and possibly adjust the salary thresholds for exemption. The Department of Labor could also appeal the ruling.
For now, employers that have already made changes to their compensation plans can determine if they want to continue with the changes, suspend the changes, or roll back those changes pending new developments. These decisions should be made in accordance with any applicable state or local laws.
REDWâ€™s HR Consulting Team will continue to monitor this important issue and provide you with the latest developments as they become available.
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