New Overtime Rule Declared Invalid

Posted by BAS - 14 September, 2017


A U.S. District Court in Texas struck down the 2016 overtime rule which would have made many more workers eligible for overtime.

The Fair Labor Standards Act (FLSA), establishes minimum wage, overtime pay, recordkeeping, and youth employment standards for employees in the private sector and in Federal, State, and local governments. 

All employees of an employer covered by the FLSA must receive overtime pay for any hours worked over 40 in a workweek at a rate not less than time and a half of their regular rate of pay. Employees may be “exempt” from the FLSA overtime and minimum wage rules if they meet certain limited requirements. The exemptions are very narrowly defined, and include

  • Executive, administrative, and professional employees (including teachers and academic administrative personnel in elementary and secondary schools), outside sales employees, and certain skilled computer professionals (as defined in the Department of Labor's regulations)
  • Employees of certain seasonal amusement or recreational establishments
  • Employees of certain small newspapers and switchboard operators of small telephone companies
  • Seamen employed on foreign vessels
  • Employees engaged in fishing operations
  • Employees engaged in newspaper delivery
  • Farm workers employed on small farms (i.e., those that used less than 500 "man‑days" of farm labor in any calendar quarter of the preceding calendar year)
  • Casual babysitters and persons employed as companions to the elderly or infirm

The guidance that was overturned would have modified the “white collar” exemption to the overtime rules by raising the salary threshold from $23,660 to $47,476 a year ($455 to $913 a week).  The plaintiffs bringing the case argued that the overtime rule raised the minimum salary threshold so high that it made all other tests for the white collar exemption irrelevant.

The District Court Ruling is a final action and halts implementation of the new rule.

Topics: Enrollment/Eligibility, HR & Benefits Compliance

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