Federal Judge Strikes Down White-Collar Exemption Rule

In Labor by Coolidge Wall

A federal judge in Texas has held that the Department of Labor exceeded its authority by substantially raising the minimum salary threshold required for employees under the “white collar” exemptions. In May 2016, the DOL issued regulations that would have more than doubled the minimum annual salary threshold for the Fair Labor Standard Act’s “white collar” executive, administrative and professional exemptions, from $455 per week ($23,660 annually) to $913 per week ($47,476 annually).

However, on August 31, 2017, U.S. District Judge Amos Mazzant struck down that regulation concluding it would “essentially make an employee’s duties, functions, or tasks irrelevant if the employee’s salary falls below the minimum salary level.” The judge also found unlawful a provision in the regulations that would have automatically updated the minimum salary level every three years.

As of right now, this means employers should follow the current “white collar” exemption test and its $455 per week salary test when determining whether an employee is exempt from overtime pay under the FLSA.

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