By Al L. Vreeland
Lehr Middlebrooks Vreeland & Thompson P.C.
Al L. Vreeland
As Lehr Middlebrooks Vreeland & Thompson has reported, the fate of Obama Department of Labor’s attempt to increase the salary threshold for the white-collar exemptions under the Fair Labor Standards Act has been a roller coaster ride. The regulations, which were scheduled to take effect last December, would have increased the salary threshold required for the white-collar exemptions to the FLSA’s overtime requirement from the current $23,660 to a whopping $47,476.
Right before the increase was to go into effect, a Texas federal court put the regulation on hold while it considered a legal challenge to the Department of Labor’s authority to make such a drastic change. In doing so, the court suggested that the DOL might not have the authority to set any salary threshold under the FLSA. In its last hoorah, the Obama DOL appealed the temporary hold on the increase right before President Donald Trump’s inauguration.
Enter the Trump DOL. After several delays, the Trump DOL continued to support the appeal on the issue of whether it had the authority to set any salary threshold, but asked the Court of Appeals to give it time to revisit the amount of the increase. This was a risky gambit by the Trump DOL as the regulatory process is slow and it will take months for it to set a lower salary threshold – as it is expected to do. If the Court of Appeals reversed the Texas judge, the Obama regulation would go into effect until the Trump DOL could revise it – leaving employers exposed to overtime liability during the interim.
The afternoon of Thursday, Aug. 31, 2017, the skies cleared. While the Court of Appeals pondered what to do with the temporary hold, the Texas judge issued his permanent decision – striking down the increase of the salary threshold. This time, the Texas judge acknowledged DOL’s right to set some salary threshold, but decided that the Obama rule doubling the threshold was too much.
This decision should end the pending appeal of the temporary hold. And it should alleviate the Trump DOL’s concern over its authority to set some threshold while also eliminating the risk that the Obama era hike could go into effect temporarily. The Trump DOL will have to decide whether to appeal this ruling; our money says they won’t.
Al Vreeland is a founding member of Alabama-based Lehr Middlebrooks Vreeland & Thompson P.C., the Alabama Retail Association’s employment law partner. Visit ARA’s Employment Law Resource Center to learn more about your employment law benefits.