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Court Overturns Overtime Rules

A federal court has overturned the Obama-era overtime pay rules that drew strong opposition from employer groups when they were announced.

The court ruled that the Department of Labor lacked statutory authority to change the definitions of which kind of supervisor or managerial duties should be used to determine who is exempt.

Federal district court Judge Amos Mazzant held that while it is legal for DOL to raise the overtime pay threshold dollar amount, under the law it is up to Congress to make the decision about which duties determine who is an exempt employee.

The court said the law “is unambiguous because the plain meanings of the words in the statute indicate Congress’s intent for employees doing ‘bona fide executive, administrative, or professional capacity’ duties to be exempt from overtime pay.”

Mazzant also struck down the portion of the regulations that created a mechanism for automatically updating the dollar amount for the minimum salary threshold every three years.

The rules have never gone into effect because they had been under a court stay since late last year. The new rules would have doubled the threshold standard from the current $23,660 to $47,476.

Business groups, including the U.S. Chamber of Commerce and the National Retail Federation, along with 21 states filed lawsuits challenging the legality of the rules.

The Trump DOL recently sought public comment on that appropriate salary level for demarcating the border between employees eligible for overtime and those who are exempt (AA, 8-15-17, P./ 3).

The House of Representatives also has passed a bill to allow employees to swap overtime pay for comp time, which unions oppose and is given little chance of passing the Senate (AA, 6-30-17, P. 3).

The Trump Administration Labor Department is not expected to pursue an appeal of the court decision.

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