HR Alerts

14 articles in hralerts

Commensurate Wage Compliance Conference Approved for 13 HRCI and SHRM Credit Hours

Commensurate Wage Compliance Training – Still Time to Register

The Advisory Committee on Increasing Competitive Integrated Employment for Individuals with Disabilities (the Committee) Final Report

Government Contractor Paycheck Transparency Rule Nullified by Congress

The Workforce Innovation and Opportunity Act (WIOA) and FLSA Section 14(c) Enforcement

Free HRAlert Email Signup Instructions

President Signs Executive Order Requiring Paid Sick Leave

New FMLA Forms Published May 2015

Court Vacates Key Sections of the New Domestic Employee & Companion Regulation

USDOL Certification Office Sending

Treasury Department Announces One-Year Delay Enforcing the Affordable Care Act, ACA

NLRB & the USDOL Issue New Regulations and Procedures

OFCCP Publishes New Regulation for Federal Contractors

Court Rules Obama's Minimum Salary Increase Invalid


Court Rules Obama's Minimum Salary Increase Invalid

 

Trump Justice Department Withdraws Appeal

 

The Federal District Court for the Eastern District of Texas permanently blocked the Obama revision to 29 CFR Part 541 that increased the minimum salary for salaried exempt Executive, Administrative, and Professional (EAP exemption) employees. The regulation, 29 CFR Part 541, provides a duty test and minimum salary to be exempt from overtime pay. In 2016, the Obama Administration revised the regulation doubling the minimum salary to be exempt without changing the duty tests from $455/week, $23,660 per year to $913/week, $47,476 per year.  The effective date was to be last December 1, 2016. A District Court temporarily blocked the rule in late November just days before the effective date.

 

The Obama Department of Justice appealed to the 5th Circuit Court of Appeals the District Court's initial decision that temporarily blocked the revision. The Appeal has been waiting oral arguments and continuances since December.

 

On August 31, US District Court Judge, Amos L. Mazzant, found the Obama revision of the regulation invalid in that it was inconsistent with the Congressional intent in Section 13 of the Fair Labor Standards Act, FLSA. The Judge cited the US Supreme Court decision in Chevron that regulations must meet a two part test to be valid. In reviewing the statutory exemption and the history, Judge Mazzant found that it was Congress’s intent that the duties test be the primary factor in determining who was exempt. He found that the Obama Administration’s doubling of the salary made the salary test the primary factor in determining who could be exempt, not the duties of the position. His ruling states:

 

“[t]he Department has always maintained that the use of the phrase ‘bona fide executive, administrative or professional capacity’ in the statute requires the performance of specific duties”). Because the Final Rule would exclude so many employees who perform exempt duties, the Department fails to carry out Congress’s unambiguous intent. Thus, the Final Rule does not meet Chevron step one and is unlawful.

 

The Final Rule more than doubles the previous minimum salary level. By raising the salary level in this manner, the Department effectively eliminates a consideration of whether an employee performs “bona fide executive, administrative, or professional capacity” duties. As explored above, the plain meaning of the words in Section 213(a)(1) indicates Congress defined the EAP exemption with regard to duties. In other words, Congress intended for employees who perform “bona fide executive, administrative, or professional capacity” duties to be exempt from overtime pay.

 

The judgment results in the current regulation, revised in 2004, with the minimum salary at $455 per week, $23,660 per year, remaining the law. Exempt employees must continue to meet the existing duties and salary test as published in the 2004 revision of 29 CFR Part 541.

 

Trump DOJ Drops Appeal

 

On September 6, 2017, the Trump DOJ withdrew the appeal that the Obama DOJ had filed with the 5th Circuit. The salary increase to $913/week is now dead.  $455/week remains the minimum salary to be exempt as an Executive, Administrative or Professional employee.

 

The Trump Administration has published notice that it intends to revise and update the regulation. In its notice it has requested comments from stakeholders, employers, associations, and the public. Comments are due by September 25, 2017, and instructions are in the August issue of the Knuckles Report. 






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