Tuesday, November 22, 2016
District Court Enjoins New Overtime Salary Threshold (and Basically Holds that Salary-Basis Test is Unlawful)
Today, the Eastern District of Texas just issued a nationwide preliminary injunction barring application of the Department of Labor's (DOL) new minimum salary threshold for overtime exclusions under the Fair Labor Standards Act.
The decision is stunning. The court relies almost exclusively on dictionary definitions of the terms of the FLSA's overtime provisions. In so doing it states repeatedly that the FLSA's statement that the DOL may define and delimit the meaning of "administrative, exccutive, and professional" does not include the authority to set minimum salary thresholds. According to the court, the DOL can only update the duties. Thus, if an employee meets the duties of, say, an administrative employee, they should be excluded no matter their salary. However, perhaps recognizing that this line of reasoning runs contrary to decades of overtime law, the court drops a footnote saying it wasn't questioning the salary-basis test generally -- the court was addressing only the new salary threshold was under issue. But as far as I can tell, the only logical conclusion from the court's reasoning is that the salary-basis test in general is illegal (if someone sees a way around this in the decision, definitely let me know). In other words, if this decision stands, I think the only logical conclusion is that there will no longer be a salary-basis test for overtime exemptions.