Employers scored a big victory Thursday when a Texas federal judge struck down a rule put forward by the Obama administration that doubled the salary threshold under the Fair Labor Standards Act for workers to qualify for so-called white collar exemptions for overtime pay.
U.S. District Judge Amos Mazzant granted summary judgment to the Plano Chamber of Commerce, more than 55 other business groups and 21 states that had challenged the Obama administration’s 2016 rule raising the minimum salary for exemptions to just over $47,000 per year, and increased the overtime eligibility threshold for highly compensated workers from $100,000 to about $134,000.
The judge said the “significant increase” would essentially render meaningless the duties, functions and tasks an employee performs if their salary falls below the new minimum salary level.
Michael Hancock of Cohen Milstein Sellers & Toll PLLC, formerly an assistant administrator for the Department of Labor’s Wage and Hour Division, called Judge Mazzant’s ruling “an absurdity,” saying the judge “just blew 80 years of both administrative and judicial rulemaking out the window.”
“The court seems to think that if an employee meets the duties test, there is no further limitation on qualifying for the exemption,” Hancock said. “That has never been the position of the DOL since the FLSA was enacted, and no court has ever issued such a ruling.”
He added: “It’s literally unprecedented for a court to rule that duties alone define the limits of the EAP exemption. It leaves employees completely unprotected in terms of how much they are paid in both minimum wages and overtime.”
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