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Increased Salary Threshold for Overtime Exemptions Struck Down By Federal Judge

In a victory for employers in Connecticut and across the country, a federal district court in Texas last week invalidated the Obama Administration’s Department of Labor overtime regulation which sought to increase the salary threshold for the overtime exemptions under the Fair Labor Standards Act from $455 per week ($23,660 annually) to $913 per week ($47,476 annually) with the thresholds increasing every three years.  For employers who have exempt employees receiving salaries below the proposed increased threshold, this decision allows them to continue to keep those employees exempt at their current salary.  The court’s decision follows its injunction last November to enjoin the rules from being implemented.

“This significant increase would essentially make an employee’s duties, functions, or tasks irrelevant if the employee’s salary falls below the new minimum salary level,” the judge wrote in his August 31st opinion.  “As a result, entire categories of previously exempt employees who perform ‘bona fide executive, administrative, or professional capacity’ [EAP] duties would now qualify for the EAP exemption based on salary alone. . . This is not what Congress intended with the EAP exemption.”

This decision comes as the Trump Administration has begun the process of revising the “white collar” exemption going forward and the Trump-DOL withdrawing the appeal filed by the Obama Administration.