On November 22, 2016, the U.S. District Court in Texas enjoined nationwide the Obama Department of Labor’s Overtime Rule, which would have increased the salary threshold for overtime exemption to $47,476. The District Court decision indicated that the DOL has no authority to set any salary for bona fide executive, administrative, or professional employees.
President Obama’s Secretary of Labor Thomas Perez immediately appealed that ruling to the U.S. Court of Appeals for the Fifth Circuit. Due to the change in administration, several requests for extensions of time were granted and the DOL’s final briefing deadline was pushed back to June 30, 2017.
In its brief filed on June 30, the Department of Justice, representing on behalf of the DOL, abandoned its defense of the increased salary level. The brief states that the DOL intends to revisit the salary threshold by new rulemaking.
The DOJ is appealing a portion of the November 22, 2016 District Court decision that says the DOL does not have authority to set any salary level thresholds for the exemptions. It is apparent from this briefing that Secretary of Labor Alexander Acosta and the DOL would like a ruling that the DOL has authority to set a salary level under the Fair Labor Standards Act. The DOJ is appealing only that part of the lower court’s order.
During his confirmation hearing earlier in 2017, Secretary of Labor Acosta stated that while he favors raising the salary threshold for exempt status from $23,666 – the amount in place before the blocked 2016 Overtime Rule – he believes the new threshold should be “somewhere around $33,000.”
The DOL says in its brief that it will not issue a new Proposed Rule until the litigation is resolved – or at least until its authority to set a salary level is resolved.
Editor’s Note: This writer had hoped the DOL would totally abandon its appeal and leave in place the decision of the U.S. District Court in Texas. That would have been the cleanest way to handle the situation. It would have made it more difficult for a future pro-labor administration to impose a high salary level threshold