California Labor &
Employment Law Blog
Update on DOL Overtime Rule Litigation
Sep. 6 2017

Update on DOL Overtime Rule Litigation

Topics: Wage & Hour Issues

As employers will recall, last year the Department of Labor (under the prior Obama administration) issued a new rule dramatically increasing the minimum salary to qualify for an exemption from overtime under the Fair Labor Standards Act.  Shortly before the new rule was to take effect, a Texas court issued a preliminary nationwide injunction enjoining the new rule.  The DOL appealed that ruling and the appeal has been pending (but is not yet decided) before the Fifth Circuit Court of Appeals.  Meanwhile, the litigation before the Texas trial court has continued and on Thursday, the same judge that issued the earlier preliminary injunction granted summary judgment in favor of the state plaintiffs challenging the rule.  The summary judgment ruling finds that the overtime rule is invalid as a matter of law (this is no longer just a “preliminary” finding).  Based on this new ruling, the DOL today filed a request with the Fifth Circuit Court of Appeals to dismiss the pending appeal of the preliminary injunction order as moot.  It is unclear whether the DOL will appeal the latest summary judgment ruling, but it seems that the Obama-era overtime rule is most certainly dead.  As discussed on this blog, however, the DOL under the Trump administration recently solicited comments intended to craft a new replacement rule.  As such, it appears that the overtime standards will still be revised under the Trump administration.  The extent of the revision remains to be seen but no doubt will be more modest than under the prior proposed rule.

Meanwhile, California employers need to watch the progress of AB 1565, which would increase the minimum salary to qualify for exempt status under California law for most employees to $47,472 per year (or at least twice the state minimum wage in effect, whichever is higher).  The bill was passed by the Assembly and is pending in the Senate.  

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