$47,476 Minimum Salary Struck Down, New Minimum of About $33,000 Expected
Author: Michael Cardman, XpertHR Legal Editor
August 31, 2017
By raising the minimum salary threshold for most overtime-exempt employees from $23,660 to $47,476, the US Department of Labor (DOL) would have made an employee's job duties irrelevant, the US District Court for the Eastern District of Texas held. This is not what Congress intended when it wrote the Fair Labor Standards Act (FLSA); therefore, the court ruled that the DOL exceeded its authority by setting the salary level too high.
Significantly, the court held that when the DOL set the $23,660 minimum salary level in 2004, it was consistent with Congress's intent because the level was set as a floor to screen out "obviously nonexempt employees, making an analysis of duties in such cases unnecessary."
This "clears the way for DOL to issue a revised regulation," said Paul DeCamp, Member of the Firm in the Employment, Labor & Workforce Management practice in the Washington, D.C., office of Epstein Becker Green, and a former administrator of the DOL's Wage and Hour Division.
"It would not surprise me to see an updated final rule with a salary level commensurate to the level [Labor Secretary Alex] Acosta has described," DeCamp added. In his confirmation hearing earlier this year, Acosta said the minimum salary level should be "somewhere around $33,000" to account for the rate of inflation since 2004.
Meanwhile, the court also denied a request from the Texas AFL-CIO to intervene as a defendant in the not-unexpected event that the Trump administration declines to appeal the order invalidating the overtime rule.