Do you remember 2015? Yes, it may seem like the distant past, but in 2015 the Obama administration approved a new rule increasing the minimum salary necessary to qualify as exempt from overtime under the Fair Labor Standards Act (FLSA) from from $455 per week ($23,660 annually) to $913 per week ($47,476 annually). But before these changes could take effect, the U.S. District Court of the Eastern District of Texas enjoined the new rule on December 1, 2016. The court ruled that although the FLSA authorizes the Department of Labor to “delimit” and “define” the scope of the exemption for executive, administrative, and professional employees, the statute does not permit the DOL to limit those exemptions to workers making more than a designated minimum salary. The court further held the new rule does not reflect a permissible construction of the FLSA, because the significant increase to the salary level creates essentially a de facto salary-only test.
The DOL appealed the ruling, but while that appeal was pending, two things happened: First, Trump’s new Secretary of Labor sought public comments about a new minimum salary for exempt workers. Second, the District Court granted summary judgment against the DOL. On October 30, 2017, the DOL appealed this decision to the U.S. Court of Appeals for the Fifth Circuit. The DOJ lawyers representing the DOL “will file a motion with the Fifth Circuit to hold the appeal in abeyance while the Department of Labor undertakes further rulemaking to determine what the salary level should be.”
So the salary-basis rules proffered by the Obama administration seem destined to be replaced without ever becoming effective. The question now is what the new salary-basis rules will look like. Based on comments made at his confirmation hearing, Labor Secretary Alex Acosta believes the new minimum salary should only be increased to $33,000. Whether the DOL will adopt this number is unknown, but one thing is certain: the new rule will require much less than the $47,476 minimum salary under the prior amendments.
