Federal judge invalidates white collar overtime rule

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On August 31, 2017, a Texas federal judge struck down the Obama administration’s controversial rule that nearly doubled the salary threshold for the Executive, Administrative, Professional, Outside Sales and Computer Employees (EAP) exemption under the Fair Labor Standards Act (FLSA).

The Texas judge, Amas Mazzant, found that the increase in the salary test from $23,660 to nearly $47,476 would dilute the “duties” test which focuses on the employee’s dues, functions or tasks in determining whether the exemption applies. The decision was expected after a June 30th court filing where the Department of Labor (DOL) told the Fifth Circuit of its intention to abandon the rule and address at a later date.

Based on previous statements made by the current administration, employers should expect a new rule in the future, where the DOL is anticipated to set the salary threshold somewhere between the current level of $23,660 and the $47,476 level set by the Obama administration.