Recently, a Texas federal judge struck down an Obama administration Department of Labor rule that doubled the salary employees must make to be considered exempt from overtime pay. The rule’s invalidation should provide immediate relief to employers concerned about additional overtime pay, or increased salaries that the Obama administration’s overtime rule would have required.
In 2016, after years of consideration, the Obama administration issued the long-anticipated DOL rule that increased the minimum salary for exempt workers (workers exempt from receiving overtime pay) from $23,600 to just more than $47,000, and the minimum salary for workers who qualify for the “highly compensated” exemption from $100,000 to about $134,000. Late last year, U.S. District Judge Amos Mazzant issued a preliminary injunction that blocked the rule from coming into effect. Judge Mazzant granted summary judgment in favor of certain business groups that had challenged the Obama administration’s rule. Judge Mazzant reasoned that the significant salary increase would render the analysis of employees’ duties, functions, and tasks meaningless, and exclude from the exemption many employees who perform primarily exempt duties. Continue Reading