Overtime Rule Struck Down

The U.S. District Court for the Eastern District of Texas today struck down the overtime rule that would have extended overtime pay to more than 4 million U.S. workers, ruling in favor of the Plano Chamber of Commerce and numerous businesses who filed suit challenging the new rule in State of Nevada et al. v. U.S. Department of Labor et al., case number 4:16-cv-00731.

The Court ruled that the “significant increase” mandated by the new rule, which raised the minimum salary threshold required to qualify for exempt status under the Fair Labor Standards Act’s (FLSA) to over $47,000 per year and increased the overtime eligibility threshold for highly compensated workers from $100,000 to about $134,000, improperly makes “overtime status depend predominately on a minimum salary level, thereby supplanting an analysis of an employee’s job duties.” 

The Court concluded that the effect of excluding numerous employees who perform exempt duties from exempt status based predominately on salary level “fails to carry out Congress’ unambiguous intent” under the FLSA.