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5th Circ. Dismissal Signals End To Obama Overtime Regs

On Sept. 6, 2017, the Fifth Circuit granted the unopposed request of the U.S. Department of Labor to dismiss its appeal of U.S. District Judge Amos Mazzant’s ruling that had preliminary enjoined enforcement of the Obama administration’s revised overtime regulations. The DOL’s dismissal of the appeal likely signals the end of the Obama administration’s proposed amended overtime rules, which had sought to significantly expand the number of employees who were entitled to overtime pay under the Fair Labor Standards Act. However, it appears probable that in due course the Trump DOL will issue new regulations that similarly expand those same FLSA protections, albeit in a less drastic manner.

Procedural Background

The FLSA requires that employees be paid an overtime premium for all time worked in excess of 40 hours in a workweek. However, FLSA exempts from the minimum wage and overtime rules any employees who are employed in a “bona fide executive, administrative[] or professional” capacity, commonly referred to as the “white collar exemptions.” To qualify for the white collar exemptions under current DOL regulations, an employee must: (1) perform bona-fide executive, administrative[] or professional duties, as defined in the regulations; (2) be paid on a salary basis; and (3) be paid a salary not less than the prescribed minimum. The current minimum salary is $23,660 per year.

Under the Obama administration, the DOL issued regulations that would have increased the minimum salary threshold for the white collar exemptions from $23,660 to $47,476 per year. In response to the DOL’s proposed regulations, numerous states (the states) filed suit against the DOL, requesting emergency injunctive relief enjoining the DOL from implementing the new regulations. The Plano Chamber of Commerce in Texas and more than 55 other business groups also filed suit challenging the rule seeking an expedited summary judgment ruling on the issue.

On Nov. 22, 2016, Judge Mazzant, sitting in Texas, issued an order that preliminarily enjoined the DOL from implementing the rule, preventing it from going into effect. The DOL appealed that ruling.


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