The Fifth Circuit Court of Appeal dismissed the U.S. Department of Labor’s appeal of an order enjoining the Department from enforcing a rule that raised the minimum annual salary for an employee to be exempt from overtime from $23,660 to $47,760. This comes on the heels of the District Court invaliding the salary increase, finding the Department exceeded its authority in adopting the rule. These two rulings effectively end the Obama-era increase to the minimum salary threshold for overtime exemptions.
Here’s how the litigation played out.
- November 22, 2016 – a U.S. District Court in the Eastern District of Texas granted a Preliminary Injunction enjoining the Department of Labor from implementing and enforcing the Overtime Final Rule on December 1, 2016.
- December 1, 2016 – the Department of Labor appealed the preliminary injunction to the U.S. Court of Appeals for the Fifth Circuit.
- August 31, 2017 – the U.S. District Court granted summary judgment against the Department. The court held that the Final Rule’s salary level exceeded the Department’s authority, and concluded that the Final Rule is invalid.
- September 6, 2017 – the Fifth Circuit dismisses the Department of Labor’s appeal, at the department’s request.
While this is an important victory for employers, as compliance with the revised overtime regulations would have been costly and burdensome for many, an increase in the minimum salary level is still on the horizon. The Department is expected to propose increasing the salary thresholds, but to a lesser amount than was proposed under the Obama Administration. Indeed, Secretary of Labor Alex Acosta has indicated that he believes the minimum salary level should be in the $30,000 to $35,000 range (up from $23,660). Employers can make their voices heard on this issue by responding to a Request for Information concerning the overtime regulations by September 25.
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