Category Personnel/Employment
Title Federal Judge Strikes Down Overtime Rule
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Preview Federal Judge Strikes Down Overtime Rule
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Federal Judge Strikes Down Overtime Rule

In August 2016, struck down the challenged change change to the Fair Labor Standards Act. The change was to raise the minimum salary of an exempt employee to $913 per week from $455 per week or $47,476 annually from $23,660 annually.

The change, which was to go into effect on December 1, 2016, was blocked by the judge in late November 2016. The government appealed the ruling. However, after the ruling, Donald Trump was elected President and then the U.S. Department of Labor would continue to argue it has the authority to set a salary threshold. However, they indicated they would not advocate for the high ($913 per week) threshold.

The DOL has begun seeking public comments on what the new exempt threshold should be. 

The judge's 18-page decision pretty much gives the same rationale he had used to grant the injunction and stopping the raise to take place on December 1, 2016. He believed that the DOL exceeded its authority to use a high scalar that would basically eliminate the "duties" test. He also ruled that the automatic updating of the minimum salary level every three years was similarly unlawful and struck that down also.

The Bottom Line

There are three avenues of activity proceeding at this point. First, the DOL has already asked for public comment on the minimum salary test. This will last several months. The DOL will probably come out of this with a proposed minimum exempt salary test that would be lower than the previously proposed minimum of $913 per week.

Second, the Court of Appeals is still an ongoing case. However, the DOL asked the court to cancel the oral hearing until further discussions on both sides take place in an attempt to narrow the dispute or possible eliminate it. The DOL then asked the appeals court to dismiss the appeal altogether and the court granted the dismissal of the appeal.

As for now, Christian schools should continue to use the $455 per week or $23,660 as the threshold to determine exempt status employees. Under federal law, teachers are automatically exempt if they meet certain criteria, and academic administrators have a different exempt threshold. The most important point to remember is that just because you put a person on a salary, does not make them automatically exempt. There are "duties tests" that must be observed to determine if a person is truly an exempt employee. It is not about titles, but duties!

For more on this go to www.acsi.org/leg-resources

LLU 28.2

Notice: This article is designed to provide accurate and authoritative information in regard to the subject matter covered. It has been provided to member schools with the understanding that ACSI is not engaged in rendering legal, accounting, tax or other professional services. If legal advice or other expert assistance is required, the services of a competent professional should be sought. Laws vary by jurisdiction, and the specific application of laws to particular facts requires the advice of an attorney.

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