Texas Judge Strikes Down D.O.L. Overtime Changes

October 18, 2017, 1:40 PM

Last Fall, employers were struggling with how to comply with a proposed Department of Labor regulation roughly doubling the minimum salary for exempt status to $47,476 per year. The change was estimated to end the overtime exemption for approximately 4.2 million workers. The proposed regulation was opposed by more than 50 pro-business organizations and 21 states, all of which joined to challenge the new rule in court. The proposed December 1, 2016 effective date was set aside temporarily in a ruling by a federal court in Texas just eight days before it would have taken effect. On August 31 of this year, that same court issued a final ruling striking down the regulation and leaving the existing salary threshold of $23,660 per year in place.

The courts ruling recognized that DOL has the authority to establish regulations implementing the Fair Labor Standards Act, but held that the proposed regulation was not a proper exercise of that authority, in part because the increase was just too great. Given this ruling and a Trump administration that opposed the change, the salary level for exemption is not likely to change significantly in the foreseeable future.