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Federal Court strikes down Overtime Rule

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A Texas federal district court judge invalidated the Department of Labor’s (“DOL’s”) controversial Final Rule that would have made more than 4 million currently exempt employees eligible for overtime. On May 23, 2016, the DOL issued its Final Rule which sought to increase the minimum salary threshold to qualify for the “white collar” overtime exemption under the Fair Labor Standards Act from $455 per week ($23,660 annually) to $921 per week ($47,892 annually). Last November, U.S. District Judge Amos Mazzant blocked the overtime rule from taking effect, but did not declare it invalid. See here.

On August 31, 2017, Judge Mazzant granted summary judgment to the more than 55 business groups challenging the rule, stating it was a “significant increase [that] would essentially make an employee’s duties, functions, or tasks irrelevant if the employee’s salary falls below the new minimum salary level.”  Even though the Court’s ruling invalidates the Rule, this issue is not likely to go away.  Current Secretary of Labor Alex Acosta has expressed interest in revising the overtime rule albeit with lower salary thresholds.