A federal district court in Texas on Friday invalidated the Department of Labor’s overtime rule, which would have significantly increased the salary level below which an employee is automatically subject to the Fair Labor Standards Act’s overtime and minimum wage requirements.
In his ruling, District Judge Sean Jordan agreed with the business groups challenging the rule that DOL exceeded its statutory authority by imposing a salary level that “effectively eliminates consideration of whether an employee performs ‘bona fide executive, administrative, or professional capacity’ duties in favor of what amounts to a salary-only test.” The judge also said DOL’s automatic updates to the minimum salary threshold every three years “violates the notice-and-comment rulemaking requirements of the [Administrative Procedure Act].”
In light of the court’s decision, the minimum salary threshold is once again set to $35,568, and the threshold for “highly compensated employees” (those employees subject to a more streamlined “duties test”) is set to $107,432.
DOL has the option of appealing the decision to the Fifth Circuit Court of Appeals.
