Law Offices of John C. Lane
Federal Court Permanently Enjoins Obama Regulation
Regarding Non-Exempt Employees
On August 31, 2017, Texas Federal Judge Amos L. Mazzant permanently blocked the implementation of an Obama-era Labor Department regulation that doubled the income level below which employees are entitled to wage benefits such as overtime payments, provided by the Fair Labor Standards Act, a federal law. The rule would have increased the weekly wages for non-exempt employees to $913, or $47,476 per year.
Judge Mazzant ruled that the Department ignored the statutory requirements of FLSA § 213(1)(a)for defining executive and administrative employees who are not entitled to FLSA protection, thereby exceeding its administrative authority. The Labor Department is working on a revised rule.
Judge Mazzant noted that since 2004, the Department had used a set of criteria that was not based on salary alone. For an employee to be deemed exempt from the statutory wage protection, the employee had to be salaried, at a minimum salary level set by the Department (much lower than $913), and must be performing executive, administrative, or professional capacity duties. Although Section 213(a)(1) does not provide for a salary criterion, the Department has used a permissible salary level as a test for identifying categories of employees Congress intended to exempt. By more than doubling the previous minimum salary level, the Department essentially made an “employee’s duties, functions, or tasks irrelevant” and beyond the Congressional intent.
In November 2016, Judge Mazzant temporarily stayed the regulation. The August ruling made the injunction permanent. Now the Department has withdrawn its appeal of the November ruling, and is moving forward with a Request for Information and is accepting comments through September 25, 2017, to aid in the formulation of a revised regulation.
© September 2017, Law Offices of John C. Lane