The United States District Court for the District of Texas issued a broad decision today invalidating the U.S. Department of Labor’s attempt to amend the so-called “White Collar” Exemption by doubling the minimum salary paid to such individuals. Read the decision here.
I have previously posted about the DOL Overtime Rule. See “Time Running Out for Compliance with New DOL Overtime Regulation” (September 19, 2016) and “New Wage and Hour Requirements for Certain Employees of Manufacturers” (May 31, 2016). While the Trump Administration had announced that it would not implement the Obama-era regulation (which doubled the minimum salary to be paid employees to qualify as being exempt from minimum wage and overtime requirements), the DOL continued to argue that it had the statutory right to do so.
In its holding today, the Court rejected that assertion. In a carefully worded decision which potentially opens the door to a broad reconsideration of the “White Collar exemption,” the Court held that the DOL’s decision to double the salary threshold to be considered exempt was contrary to Congressional intent. The Court reasoned that in adopting the Fair Labor Standards Act, Congress clearly indicated that employees who performed executive, administrative and professional activities on behalf of management were not eligible for minimum wage or overtime. While Congress broadly defined these categories, it left to the task to the DOL to more clearly define them. Yet, by doubling the salary threshold, the DOL essentially abdicated its role to define the limits of what Congress intended.
The Court wrote, “[t]his significant increase would essentially make an employer’s duties, functions, or tasks irrelevant if the employee’s salary falls below the new minimum salary level. As a result, entire categories of previously exempt employees who perform ‘bona fide executive, administrative, or professional capacity’ duties would now qualify for [minimum wage and overtime][ based on salary alone. * * * * This is not what Congress intended . . . .”
The Court’s decision likely will not be the final word on the matter. Yet, by again focusing on the intent of Congress in adopting the FLSA, the Court seems to be signaling a desire to limit “lawmaking by regulation.”