A federal district judge in Texas has invalidated Obama overtime regulations which would have made it more likely states and local governments would have had to pay more employees overtime.
Per the Fair Labor Standards Act (FLSA), executive, administrative, and professional “white collar” employees do not have to be paid overtime if they work more than 40 hours a week. Per Department of Labor (DOL) regulations, adopted shortly after the FLSA was adopted in 1938, employees must perform specific duties and earn a certain salary to be exempt from overtime as white collar employees.
On May 23, 2016, DOL issued final rules nearly doubling the previous salary level test for white collar employees from $455 per week, or $23,660 per year, to $913 per week, or $47,476 per year. The rules also automatically updates the salary level every three years for white collar employees.
According to the Judge Mazzant, DOL does not have the authority to adopt a salary test that effectively eliminates the duties test, which is what the final rule does. The text of the final rule explicitly says that those earning less than $913 will be eligible for overtime “irrespective of their job duties and responsibilities.” The court likewise concluded that the automatic updating mechanism is unlawful. Continue reading