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Department of Labor Overtime Rule Invalidated

On Thursday, August 31, 2017, the U.S. District Court for the Eastern District of Texas struck down the DOL Overtime Rule previously announced on May 18, 2016.  The Overtime Rule, which was to take effect on December 1, 2016, required employees to earn at least $913/week or $47,476/year in order to be considered an exempt employee, even if the employee’s duties qualify as executive, administrative or professional.  However, the Overtime Rule never went into effect because the Court had granted the Plaintiffs’ request to temporarily block its implementation on November 22, 2016.

The Court held that the Overtime Rule was unlawful and granted summary judgment in favor of the Plaintiffs that consist of 21 states and more than 55 business groups.  In its decision, the Court found that because the Overtime Rule more than doubled the previous minimum salary level, such an increase would eliminate the need to consider an employee’s duties if that employee’s salary fell below the new minimum salary level.  The Court reasoned that the statutory language of the Fair Labor Standards Act made clear that both an employee’s duties and wages must be considered in determining any overtime exemption.

Click here for a more detailed summary of the Court’s decision.

If you have questions or concerns regarding this ruling and how it affects your business, please contact Maureen A. Murphy at (312) 506-4475 or  [email protected].