Dean Kpere-Daibo

Dean Kpere-Daibo Associate

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DOJ DROPS ITS APPEAL OF THE OBAMA OVERTIME RULE

On September 5, 2017, the United States Department of Justice (“DOJ”) requested the Fifth Circuit Court of Appeals dismiss as moot its interlocutory appeal of the preliminary injunction granted in State of Nevada v. U.S. Department of Labor. The preliminary injunction thwarted the implementation of the United States Department of Labor’s (“DOL”) final overtime rule, which would have doubled the salary threshold for executive, administrative and professional exemptions to the overtime requirements of the Fair Labor Standards Act (“FLSA”).

As you may recall, the DOL under the Obama Administration passed a final rule which would have increased the salary floor for so-called white-collar employees from $455 a week, or $23,660 annually, to $913 a week, or $47,476 annually. In addition, under the rule, the salary level would have been automatically updated every three years at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, which is currently the South. The final rule was set to go into effect on December 1, 2016, but in November of 2016, a Texas federal court granted an emergency preliminary injunction in a consolidated case challenging the rule.

On summary judgment, the district court ruled the DOL’s final rule improperly made the overtime status depend predominately on the minimum salary level, thus displacing the appropriate analysis of an employee’s job duties. More recently, the DOJ under the Trump Administration backed off of its defense of the overtime rule stating the agency “has decided not to advocate for the specific salary level set in the final rule at this time and intends to undertake further rulemaking to determine what the salary level should be. Accordingly, the Department requests that this Court address only the threshold legal question of the Department’s statutory authority to set a salary level, without addressing the specific salary level set by the 2016 final rule.”

Despite the DOJ dropping its appeal in the Fifth Circuit, in July, the DOL released its request for information seeking comments and information related to the appropriate salary levels for the white-collar employee overtime exemptions. Accordingly, while the appeal of the Obama Overtime rule has been dropped, the DOL’s request for information clearly indicates that this is not the end of the DOL’s attempt to adjust the salary threshold to the white-collar exemptions to the FLSA. Employers should keep an eye out for any new proposed overtime rules that may again attempt to increase the salary levels for the overtime exemptions.

The St. Louis employment attorneys at McMahon Berger have been representing employers across the country in labor and employment matters for over sixty years, and are available to discuss these issues and others. As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation as every situation must be evaluated on its own facts. The choice of a lawyer is an important decision and should not be based solely on advertisements.

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