Obama Salary Increase Ruled Invalid

On August 31, 2017, U.S. District Court Judge Amos L. Mazzant of the Eastern District of Texas rendered a final judgment on the Obama Overtime Rule – it is invalid.

See our prior blog for a recap of this story at:  https://yorkbowmanlaw.com/timeline-update-texas-judge-stops-obamas-salary-increase.  Ultimately, 21 states and 50 businesses filed suit to challenge the DOL’s  implementation of the new regulation to increase the minimum salary for exempt employees from $455 per week (or $23,660 per year) to $913 per week (or $47,476 per year). This regulation is referred to as the white collar exemptions.

After finding that the states and businesses had standing to sue, the Court assessed the plaintiffs’ claims that the DOL exceeded  its authority. The Court concluded that Congress intended to apply the white collar exemptions to employees based on their job duties and not salary levels. Thus, an increase in minimum salary level that more than doubles the current minimum salary level would “make an employee’s duties, functions, or tasks irrelevant if the employee’s salary falls below the new minimum salary level.” Simply put, the Court found the DOL “exceeded its authority and [went] too far with the Final Rule.”

As an employer what should you do? As a result of the final judgment, employers are not required to raise the minimum wage for exempt employees. However, employers should be cautioned that the DOL may appeal the final judgment.

For more clarity on this and other employment related issues, consult with an employment attorney.