Obama Administration Rule on Extended Mandatory Overtime Pay Struck Down

Yesterday, federal judge, Amos Mazzant of the U.S. District Court for the Eastern District of Texas, struck down an Obama administration rule that would have extended mandatory overtime pay to more than 4 million U.S. Workers. The ruling, siding with business groups and 21 states that had challenged it, came after the same judge last year blocked the rule from taking effect pending his final decision.

 The rule would have doubled to nearly $47,000 the maximum salary a worker could earn and still be automatically eligible for overtime pay. Judge Mazzant determined that the Department of Labor’s (DOL) new overtime rule improperly looked at salaries instead of job descriptions when determining whether a worker should be eligible for overtime pay, stating it “effectively eliminates consideration of whether an employee performs ‘bona fide executive, administrative, or professional capacity’ duties.”

 Now that the never-implemented rule has been invalidated, the DOL is back to square one with revising and updating the overtime exemption rule. Employers should prepare for an eventual increase to the exempt salary threshold, even though it isn’t clear what the final number will be. In the meantime, a request for further public input has been made by the DOL. Further questions? Contact us.

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