Federal Judge Lowers the Boom on Overtime Regulations

In the latest development of the ongoing saga regarding Department of Labor’s overtime rules, a federal district judge in Texas granted a motion for expedited summary judgment in favor of twenty-one state plaintiffs who challenged the validity of the rules in 2016.  This decision came after the same court granted an Emergency Motion for Preliminary Injunction in September of 2016, enjoining the Department of Labor (DOL) from implementing and enforcing the regulations on the grounds that “Congress defined the EAP [executive, administrative and professional] exemption with regard to duties, which does not include a minimum salary level.”
 
In the district court’s recent ruling, Judge Amos Mazzant held that the DOL exceeded authority delegated by Congress by promulgating regulations to raise the salary threshold for EAP workers from $455 per week ($23,660 per year) to $913 per week ($47,476 per year).  The regulations also would have increased the salary of highly compensated employees from $100,000 per year to $134,004 per year.
 
Such significant changes exceeded the DOL’s authority, according to the court, because they ignored Congress’ intent that a position’s duties should be considered when determining if it is eligible for an EAP exemption from overtime.  The increased salary threshold would “essentially make an employee’s duties, functions, or tasks irrelevant if the employee’s salary falls below the new minimum salary level. As a result, entire categories of previously exempt employees who perform “bona fide executive, administrative, or professional capacity” duties would now qualify for the EAP exemption based on salary alone.”  As such, the court ruled in favor of the plaintiffs and held that the regulations are invalid.