Federal Overtime Rule Invalidated; DOL Declines to Appeal

The U.S. Texas District Court in the Eastern District of Texas recently struck down the (President Obama’s era) Department of Labor’s (DOL) Overtime Rule. The rule had been enjoined by the same Texas District Court since November of last year, prior to the anticipated December 1, 2016 implementation date. The Overtime Rule would have raised the minimum salary threshold for administrative, executive and professional employees entitled overtime from $23,660 to $47,476.
The Court held that DOL overstepped their statutory authority by doubling the salary threshold and departing from Congressional intent to exempt executive, administrative and professional employees based on their duties rather than an arbitrarily high salary level. The ruling means that the previous injunction blocking the overtime rule from going into effect is permanent and the current salary threshold remains $23,660.
On Tuesday September 5th, the U.S. Justice Department of Justice declined to defend the DOLs Overtime Rule invalidated by the U.S.Texas District Court and have dropped their appeal.

Next Steps for Overtime
In July the DOL published a Request for Information in the Federal Register to gather information to aid in formulating a proposal to revise regulations pertaining to the 2016 update to overtime rules under the federal Fair Labor Standards Act (FLSA).

The RFI is specifically requesting comment on:
•Is the salary threshold increase too high?
•Should there be salary threshold discrepancies based on region?
•Should there be salary threshold discrepancies based on size of employer?
•Should there be salary threshold discrepancies based job function? (executive, administrative, professional)
•Should there be changes to the “duties test”?
•How should non-discretionary bonuses be accounted?

Last week, NPMA joined a coalition of industry allies and participated in a “Advocacy Roundtable DOL’s RFI on Overtime” hosted by the U.S. Small Business Administration. Much of the roundtable involved small business associations weighing in on what the salary threshold should be raised to and based on what metric. There is certainly a majority of business advocates that agree that the threshold should probably be raised from the $23,660 last raised in 2004 to an amount between $30,000 - $35,000 annually.
NPMA is in the process of drafting comments to determine a salary threshold that protects NPMA members companies and their employees from DOL overreach and a burdensome and unrealistic salary threshold that would automatically increase every third year.